Mehabe score: 6 G Factor: 6 Piotski Score: 5 The stock has a rating HOLD. The mehabe team score is reflective of its fundamental and technical merits. A rating above 8 is considered good buy. The stock has a G-Factor of 6 and Piotski score of 5.
Description
Indian Bank is a medium-sized bank which was started in 1907. It offers deposits, loans and services. The Bank’s segments include Treasury, Corporate/Wholesale Banking, Retail Banking and Other Banking Operations. #
Main Points
Ratios
Capital Adequacy Ratio – 14.06%
Net Interest Margin – 3.13%
Gross NPA – 9.04%
Net NPA – 2.35%
CASA Ratio – 41%Site:INDIANBMain Symbol:INDIANB
Stock trades at 138.0, above its 50dma 136.68. It also trades above its 200dma 114.1. The stock remains bullish on techicals
The 52 week high is at 157.00 and the 52week low is at 53.10
Price Chart
P/E Chart
Sales and Margin
Strengths
– Stock is trading at 0.44 times its book value
– is expected to give good quarter
– has delivered good profit growth of 33.13% CAGR over last 5 years
Weakness
– has low interest coverage ratio.
-Tax rate seems low
– has a low return on equity of 6.14% for last 3 years.
-Contingent liabilities of Rs.306227.50 Cr.
-Earnings include an other income of Rs.7092.00 Cr.
Competition
– The industry trades at a mean P/E of 18.0x. I O B trades at the industry’s max P/E of 56.04x. INDIANB trades at a P/E of 4.33x
– Industry’s mean G-Factor is 5.0 while the mean Piotski score is 8.0. INDIANB has a G-Factor of 6 and Piotski scoreof 5.
– Average 1 month return for industry is 3.1%. The max 1- month return was given by I O B: a return of 25.13 %
Quarterly Results
Sales for period ended Jun 2021 is Rs 9624.0 cr compared to Rs 10123.0 cr for period ended Jun 2020, a fall of 4.9%
Operating Profits reported at Rs 5102.0 cr for period ended Jun 2021 vis-vis 4677.0 for period ended Jun 2020 .
Operating Margins expanded 681.2 bps for period ended Jun 2021 vis-vis Jun 2020 .
The EPS for Jun 2021 was Rs 10.12 compared to Rs 15.28 for previous quarter ended Mar 2021 and Rs 3.82 for Jun 2020
Profit & Loss Statement
Profit&Loss Comments
Company reported sales of Rs 38609.0 cr for period ended TTM vis-vis sales of Rs 39108.0 cr for the period ended Mar 2021, a fall of 1.3%. The 3 year sales cagr stood at 26.3%.
Operating margins shrank to -3924.0% for period ended TTM vis-vis -2987.0% for period ended Mar 2021, contraction of 93700.0 bps.
Net Profit reported at Rs 3978.0 cr for period ended TTM vis-vis sales of Rs 3149.0 cr for the period ended Mar 2021, rising 20.8%.
Company recorded a healthy Net Profit CAGR of 118.8% over the last 3 years
Balance Sheet Statement
Cash Flow Statement
Cash Flow comments
CashFlow from operating activities was positive.
CashFlow from operating activities: Rs 17065.0 cr for period ended Mar 2021 vis-vis Rs -8396.0 cr for period ended Mar 2020
Sales Growth
Profit Growth Statement
Profit Growth Statement
Stock Price CAGR
Return of Equity
General Comments
– The company has improved its Return on Equity (RoE) metric. The RoE on Last Year basis was 10.0% compared to 6.0% over the last 3 Years. – The stock has given a return of 124% on a 1 Year basis vis-vis a return of -24% over the last 3 Years. – The compounded sales growth on a TTM bassis is 46% vis-vis a compounded sales growth of 32% over the last 3 Years. – The compounded profit growth on a TTM basis is 343% vis-vis a compounded profit growth of 34% over the last 3 Years.
Ratios
Shareholding Pattern
– FII shareholding has remained largely constant. The Jun 2021 fii holding stood at 2.99% vis-vis 1.02% for Mar 2021 – Public shareholding has remained largely constant. The Jun 2021 public holding stood at 6.71% vis-vis 6.56% for Mar 2021
Conclusion
– Stock is trading at 0.44 times its book value
– is expected to give good quarter
– has delivered good profit growth of 33.13% CAGR over last 5 years – has low interest coverage ratio.
-Tax rate seems low
– has a low return on equity of 6.14% for last 3 years.
-Contingent liabilities of Rs.306227.50 Cr.
-Earnings include an other income of Rs.7092.00 Cr.
The business fundamentals of the stock remain stable. Stronger near term results will build interest in the stock. We suggest to wait for a upturn in business performance.
Technically, the stock remains above its 50 DMA 136.68 and is trading at 138.0, thus bullish price action wise.
