Indian Bank Targets Strong Growth With Focus On Retail, Operational Efficiency Says Motilal Oswal

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Motilal Oswal Report

Indian Bank offers a combination of superior asset quality, steady double-digit loan growth, and one of the most resilient RoA profiles in the PSU space.

The robust provisioning buffer and strong capital ratios mitigate risks from the upcoming expected credit loss transition, while the expansion of retail, agriculture and MSME loan and digital initiatives provide healthy growth visibility.

The bank is well poised to deliver the best-in-class RoA at 1.3% among our coverage PSU banks, while RoE is expected to remain healthy at 16-17%.

Indian Bank stands out as our preferred pick among mid-sized PSU banks, offering both defensive stability and structural growth, with potential for sustained outperformance as the market increasingly values consistency and granularity in PSU franchises.

We reiterate our Buy rating with a revised target price of Rs 800, valuing the stock at ~1.3x FY27E adjusted book value.

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