Indian Bank Q4 Results Review - High Prudential Provisions Dent Profitability: Dolat Capital

BQ Prime’s special research section collates quality and in-depth equity and economy research reports from across India’s top brokerages, asset managers and research agencies. These reports offer BQ Prime’s subscribers an opportunity to expand their understanding of companies, sectors and the economy. .Dolat Capital Report.Indian Bank reported net interest income and pre-provision operating profit growth of 29%/47% YoY, slightly behind estimates. Profit after tax miss despite lower tax rate was mainly owing to higher prudential provisions, even as non-performing asset related provisions declined sharply. Slippages were high at 2.3%, led by elevated micro, small and medium enterprise slippages. Indian Bank further raised provisions against restructured book to 20% in Q4. Restructured portfolio at ~2.5% has come down sharply, partly led by repayments. Cumulatively, slippages from restructured book (excluding of Future retail) have been ~15% over the last 1.5 years, in line with peers.  Loan growth at 5% QoQ, though broad based, was led by corporate. With 40% of total advance (based on one year Marginal Cost Of Funds Based Lending Rate) likely to re-price in H1 FY24, near tern net interest margin outlook remains strong. Industry best provision coverage ratio to 86%, limited corporate stress, and continued recoveries to aid credit costs of 150 basis points for FY24/25E. We factor in higher NIM over the next few quarters and lower credit costs for FY24E/25E, resulting in 7-9% upgrade in earnings for FY24/25E..Click on the attachment to read the full report:.Canara Bank Q4 Results Review - Margin Outlook Steady; Remain Watchful Of ECL Provisioning: Motilal Oswal.DISCLAIMERThis report is authored by an external party. BQ Prime does not vouch for the accuracy of its contents nor is responsible for them in any way. The contents of this section do not constitute investment advice. For that you must always consult an expert based on your individual needs. The views expressed in the report are that of the author entity and do not represent the views of BQ Prime..Users have no license to copy, modify, or distribute the content without permission of the Original Owner.

Indian Bank Q4 Results Review - High Prudential Provisions Dent Profitability: Dolat Capital

Near term net interest margin outlook remains strong.

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