⚠ Disclaimer: This report is generated using AI tools and is for informational purposes only. It does not constitute investment advice. Please consult a registered financial advisor before making any investment decisions.
IOB - Fundamental Analysis: Financial Health & Valuation
Back to ListFundamental Rating: 3.6
| Stock Code | IOB | Market Cap | 62,661 Cr. | Current Price | 32.5 ₹ | High / Low | 45.2 ₹ |
| Stock P/E | 13.2 | Book Value | 18.8 ₹ | Dividend Yield | 0.00 % | ROCE | 5.95 % |
| ROE | 11.0 % | Face Value | 10.0 ₹ | DMA 50 | 35.0 ₹ | DMA 200 | 38.1 ₹ |
| Chg in FII Hold | 0.04 % | Chg in DII Hold | 1.96 % | PAT Qtr | 1,365 Cr. | PAT Prev Qtr | 1,226 Cr. |
| RSI | 36.6 | MACD | -0.83 | Volume | 47,12,362 | Avg Vol 1Wk | 62,03,846 |
| Low price | 31.6 ₹ | High price | 45.2 ₹ | PEG Ratio | 0.53 | Debt to equity | 10.9 |
| 52w Index | 7.05 % | Qtr Profit Var | 56.2 % | EPS | 2.47 ₹ | Industry PE | 7.57 |
📊 Financial Overview
- Revenue & Profitability: PAT rose from ₹1,226 Cr. to ₹1,365 Cr. (QoQ), showing steady growth.
- Margins: ROE at 11.0% is decent, but ROCE at 5.95% reflects weak capital efficiency.
- Debt: Debt-to-equity ratio of 10.9 is very high, raising leverage concerns.
- Cash Flow: EPS of ₹2.47 is modest relative to price, limiting earnings strength.
💹 Valuation Metrics
- P/E Ratio: 13.2 vs Industry PE of 7.57 → overvalued compared to peers.
- P/B Ratio: Price ₹32.5 vs Book Value ₹18.8 → trading at a premium.
- PEG Ratio: 0.53 → suggests fair valuation relative to growth.
- Intrinsic Value: Fundamentals show moderate strength, but high debt and weak ROCE limit upside.
🏢 Business Model & Competitive Advantage
- Indian Overseas Bank (IOB) operates in retail and corporate banking with government backing.
- Competitive advantage lies in legacy presence and institutional support, but high leverage reduces resilience.
📈 Entry Zone & Long-Term Guidance
- Entry Zone: ₹30–33 range looks safer given valuation and technical weakness.
- Long-Term Holding: Suitable for investors seeking exposure to PSU banking growth. Monitor debt restructuring and profitability trends closely.
✅ Positive
- Steady PAT growth (₹1,365 Cr. vs ₹1,226 Cr.).
- ROE at 11% is decent.
- PEG ratio (0.53) indicates fair valuation relative to growth.
- DII holdings increased (+1.96%), showing domestic institutional confidence.
⚠️ Limitation
- High debt-to-equity ratio (10.9).
- ROCE (5.95%) reflects weak capital efficiency.
- P/E ratio higher than industry average.
📉 Company Negative News
- Stock trading below DMA 50 & DMA 200, showing bearish technical trend.
- RSI at 36.6 indicates weak momentum.
📈 Company Positive News
- Quarterly PAT growth of 56.2% shows strong momentum.
- DII inflows (+1.96%) reflect rising domestic confidence.
- FII holdings also increased slightly (+0.04%).
🏦 Industry
- Industry PE at 7.57 highlights sector trades at lower multiples than IOB.
- Banking sector growth supported by credit expansion and government reforms.
🔎 Conclusion
- IOB shows moderate fundamentals with decent ROE but weak ROCE and high debt levels.
- Entry around ₹30–33 is favorable for long-term investors.
- Hold for exposure to PSU banking growth, but monitor debt levels and profitability consistency closely.