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Indian Bank (CMP - ₹863, Mcap - ₹1,16,243 crore, Target - ₹980, Buy)

ICICIdirect Research 10 Jul 2026 DISCLAIMER

Indian Bank delivered healthy performance in Q1FY27 with steady credit growth, marginal improvement in margin and stable return ratios. Despite elevated competition on liabilities accretion, bank has maintained margins and return ratios during the quarter.
Indian Bank delivered healthy credit growth (13.9% YoY) driven by continued focus on retail (18.7% YoY) and MSME (17% YoY) segment. Margin remain resilient with sequential improvement of 6 bps to 3.29%, as bank utilized benefit of relatively lower CD ratio (currently at 81%).
Credit cost remained broadly steady at 23 bps resulting in RoA of 1.31%, in-line with historical trend. Asset quality continued to remain stable with GNPA at 1.86% (-13 bps QoQ) while provision coverage remains strong at ~98.2%.
Core operating performance remains steady, with improved asset quality and adequate capital buffers supporting balance sheet resilience. Thus, we continue our positive stance on the stock.

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