Indian Bank Ltd., a public sector lender, has delivered over 1,000% return to investors in the last five years, making it a standout multibagger stock in the PSB counter.
The Chennai-based lender is the seventh-largest PSU bank in India with over 5,000 branches. As part of banking reforms, the government merged Allahabad Bank into Indian Bank in April 2020.
Here's a closer look at the performance of the bank and its future growth outlook:
Stock Performance
Indian Bank share price has risen 1,240% since June 2020, from near Rs 44 apiece to Rs 625. The stock hit an all-time high of Rs 658.5 earlier this month. The scrip has gained 14% in the last 12 months and 18% so far this year.
The current market capitalisation stands at Rs 84,158 crore.
The stock is currently trading at 7.5 times price-to-earnings and 1.17 times price-to-book. The Nifty PSU Bank trades at 6.91 P/E and 1.17 P/B.
The government held 73.84% stake in the lender as of March 2025. Mutual fund shareholding stands at 12.69%, foreign portfolio investors 4.74% and 2.9 lakh retail investors own 2.59% equity.
Analyst Recommendation
Of the 13 analysts tracking Indian Bank, 11 have a 'buy' rating on the stock, whereas one each recommends a 'hold' and a 'sell', according to Bloomberg data. The average of 12-month analyst price target of Rs 681 implies a potential upside of 9.3%.
Indian Bank Financial Performance
Indian Bank's revenue has increased from Rs 22,210 crore in the financial year 2021 to Rs 35,220 crore in fiscal 2025. Net interest income — the profit a bank makes from its core lending and borrowing activities — has grown from Rs 15,678 crore in FY21 to Rs 25,202 crore last year.
Profitability, measured as net interest margin, has improved from 1.9% to 3.23%.
Besides, provision has declined from Rs 7,962 crore to Rs 4,211 crore.
Business Outlook
Indian Bank management has given 8%-10% year-on-year growth guidance for deposits and 10%-12% YoY growth for advances in FY26. Due to expected rate cuts, moderation in NIM is anticipated. The revised NIM guidance is in the range of 3.15%-3.30%.
The PSU lender faces uncertainty due to the Supreme Court's judgment in the JSW Group-Bhushan Steel case. When this account was initially resolved, Indian Bank had an outstanding exposure of Rs 2,600 crore and recovered approximately Rs 1,200-1,250 crore, marking a 40% recovery rate and a 60% haircut.
The bank's management has indicated that the previously recognised recovery will likely need to be reversed, though this action might not be immediate if the affected party decides to appeal against the judgment.
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