Moneycontrol PRO
Check Credit Score
Check Credit Score
HomeNewsBusinessStocks

Hold Indian Bank; target of Rs 70: Emkay Global Financial

Emkay Global Financial recommended hold rating on Indian Bank with a target price of Rs 70 in its research report dated June 23, 2020.

June 30, 2020 / 02:05 PM IST
 
 
live
  • bselive
  • nselive
Volume
Todays L/H
More

Emkay Global Financial's report on Indian Bank

Indian Bank reported a loss of Rs2.2bn, mainly due to higher NPA provisions to improve specific PCR (now at 56%), fraud-related provision of Rs3.1bn and Covid-19-related provisions of Rs1.1bn on overdue loans benefiting from the standstill asset classification. Core PPoP was healthy, led by strong margins. Headline GNPA ratio improved 33bps qoq to 6.9%, mainly due to the moratorium (Rs7bn; 34bps of loans) and accelerated credit growth in Q4. As per management, the moratorium in the SME book stood at 40-45%. We introduce merged financials (including Allahabad Bank) and expect the bank to report negative RoA of -0.1% due to merger/Covid-19 related pain, but to gradually improve to 0.3% by FY22 led by better margins (benefiting from ALBK's strong CASA) and lower LLP.


Outlook

We continue to like Indian Bank in the mid-cap PSB space, but believe that the merger will remain an overhang in the near term. We retain Hold/UW in EAP, with a revised TP of Rs70, based on 0.6x FY22 ABV.


For all recommendations report, click here


Disclaimer: The views and investment tips expressed by investment experts/broking houses/rating agencies on moneycontrol.com are their own, and not that of the website or its management. Moneycontrol.com advises users to check with certified experts before taking any investment decisions.

Broker Research
first published: Jun 30, 2020 02:05 pm

Discover the latest business news, Sensex, and Nifty updates. Obtain Personal Finance insights, tax queries, and expert opinions on Moneycontrol or download the Moneycontrol App to stay updated!

Advisory Alert: It has come to our attention that certain individuals are representing themselves as affiliates of Moneycontrol and soliciting funds on the false promise of assured returns on their investments. We wish to reiterate that Moneycontrol does not solicit funds from investors and neither does it promise any assured returns. In case you are approached by anyone making such claims, please write to us at grievanceofficer@nw18.com or call on 02268882347