INDIANB - Fundamental Analysis

Last Updated Time : 02 Aug 25, 12:58 am

Fundamental Rating: 4.1

📊 Core Financials Analysis

Profitability

ROE of 17.1% is strong, especially for a public sector bank.

ROCE of 6.38% is modest, typical for banks due to asset-heavy models.

EPS of ₹81.4 and quarterly PAT of ₹2,786 Cr. reflect solid earnings, though slightly down from the previous quarter.

Leverage

Debt-to-equity ratio of 10.9 is standard for banks, reflecting deposit-based funding — not a concern in this context.

Dividend yield of 2.58% adds income appeal for long-term investors.

Cash Flow

Banks generate cash through interest income — Indian Bank’s consistent profitability suggests healthy operating cash flows.

📉 Valuation Indicators

Metric Value Interpretation

P/E Ratio 7.40 Fairly valued vs. industry PE of 7.49 — attractive

P/B Ratio ~1.19 Reasonable — reflects modest market expectations

PEG Ratio 0.19 Very attractive — undervalued relative to growth

Intrinsic Value Likely above current price — undervalued based on earnings and growth metrics

🏦 Business Model & Competitive Advantage

Sector: Banking — Indian Bank is a well-established PSU with a strong national presence.

Moat

Government backing, wide branch network, and access to low-cost deposits.

Improving asset quality and digital adoption enhance competitiveness.

Risks

FII holding declined (–0.20%) — cautious sentiment.

DII holding increased (+0.27%) — domestic confidence.

Exposure to NPAs and regulatory constraints remain key risks.

📉 Technical & Sentiment Indicators

RSI at 49.0 — neutral zone.

MACD positive and price above both 50-DMA and 200-DMA — bullish undertone.

Volume slightly below average — consolidation phase.

🎯 Entry Zone & Long-Term Guidance

Suggested Entry Zone: ₹600–₹620 range (near DMA support and fair valuation)

Long-Term View

Attractive for long-term investors seeking value in the banking sector.

Strong fundamentals, low valuation, and improving profitability make it a solid hold.

Monitor asset quality, credit growth, and interest rate trends.

Would you like a comparison with peers like Bank of Baroda or Canara Bank to assess relative performance and valuation?

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