Motilal Oswal Places Buy On Midcap PSU Banking Stock, Target Price Rs 380, Up 23.18% In 1 Month

Motilal Oswal Financial Services has a Buy on Indian Bank (INBK), a Midcap Public Sector Bank. The brokerage has assigned Rs 380 per share target price on the stock of INBK, claiming 11% potential upside from its current market price (CMP).

Indian Bank (INBK) reported a PAT of INR17.1b (up 41% YoY; 6% beat), driven by lower provisions (15% lower than MOFSLe). NII grew 26% YoY (in line) to INR57b. Margins increased 2bp QoQ to 3.61%, according to the Brokerage firm.

Valuation and view

According to the brokerage firm, INBK reported a healthy performance with in-line earnings, supported by margin expansion and healthy loan growth, particularly in the Retail, Agri, and Corporate segments. The bank expects the growth trend to remain healthy going ahead. Asset quality improved with reduction in slippages and healthy recovery/upgrades. Deposit growth was modest and CASA witnessed a moderation. Although the Restructured witnessed some moderation, it remains elevated. Additionally, the increase in the SMA book has prompted us to keep a close watch on the asset quality closely.
"We increase our earnings estimate for FY24/25 by 9%/6% and estimate FY25 RoA/RoE at 1.1%/17.4% and reiterate our BUY rating with a revised TP of INR380 (0.8x FY25E ABV)," the brokerage has said.

Stock Outlook

The share price of INBK on Friday closed 4.29% higher at Rs 343.45 apiece with an intraday high of Rs 345.70 and an intraday low of Rs 330.25 on BSE, respectively. The market cap of the stock is Rs 42,650.13 Crore.

The stock jumped 3.98% in 1 week. In 1 month, it gave 23.18% positive return. The stock has performed well in 3 years, gave 487.39% strong return. While in 1 and 2 years it jumped 92.71% and 153.57%, respectively.

Disclaimer - The stock has been picked from the brokerage report of Motilal Oswal Financial Year. Greynium Information Technologies, the Author, and the respective Brokerage house are not liable for any losses caused as a result of decisions based on the article. Goodreturns.in advises users to consult with certified experts before making any investment decision.