BANKINDIA - Fundamental Analysis: Financial Health & Valuation

Last Updated Time : 20 Dec 25, 11:14 pm

Fundamental Rating: 3.9

📊 Financials: Bank of India shows moderate fundamentals with ROE at 12.3% and ROCE at 6.15%, reflecting average capital efficiency. EPS stands at ₹21.8, supported by consistent profitability. Debt-to-equity ratio of 11.9 is high but typical for banks, reflecting reliance on deposits and borrowings. Quarterly PAT improved to ₹2,555 Cr. from ₹2,252 Cr., showing steady earnings growth (+7.62% QoQ).

💹 Valuation: Current P/E of 6.51 is below the industry average of 7.89, suggesting undervaluation. P/B ratio (~0.79) is attractive compared to book value of ₹180, offering margin of safety. PEG ratio of 0.16 indicates strong earnings growth potential relative to valuation. Intrinsic value appears higher than current price, making it appealing for accumulation.

🏦 Business Model: Bank of India operates as a public sector bank with diversified offerings across retail, corporate, and international banking. Competitive advantage lies in government backing, established presence, and wide customer base. However, asset quality and credit costs remain key risks in the sector.

📈 Entry Zone: Attractive accumulation zone is around ₹135–₹145 (near DMA 50 & 200 support). Current price ₹143 is close to DMA 50 and above DMA 200, suggesting consolidation. RSI at 51.2 indicates neutral momentum, while MACD (-0.04) signals flat trend.

🕰️ Long-Term Guidance: Bank of India is a fundamentally stable public sector bank with undervaluation and consistent profitability. Best strategy is to accumulate near support levels and hold for long-term compounding, leveraging its government backing and retail growth potential.

Positive

• Strong undervaluation with P/E (6.51) below industry average 📊
• Attractive P/B (~0.79) compared to peers 💰
• Quarterly PAT growth from ₹2,252 Cr. to ₹2,555 Cr. 🚀
• FII holdings increased (+0.71%), showing foreign investor confidence 📈

Limitation

• ROCE at 6.15% is modest 📉
• High debt-to-equity ratio (11.9) reflects leverage risk ⚠️
• DII holdings decreased (-0.34%), showing weaker domestic institutional support 📊

Company Negative News

• DII holdings decreased (-0.34%), reflecting reduced domestic institutional confidence 📉
• MACD (-0.04) indicates flat momentum ⚠️

Company Positive News

• Quarterly PAT growth (+7.62% QoQ) highlights steady earnings momentum 🚀
• FII inflows (+0.71%) show foreign investor confidence 📊

Industry

• Banking sector benefits from rising retail lending and digital adoption 🏦
• Industry P/E at 7.89 indicates fair valuation compared to Bank of India’s discount 📊

Conclusion

⚖️ Bank of India is a fundamentally stable public sector bank with undervaluation, government backing, and consistent profitability. While modest ROCE and high leverage are concerns, long-term prospects remain intact. Best strategy is to accumulate near ₹135–₹145 and hold for steady compounding.