1. At a Glance
Indian Bank just delivered ₹2,973 Cr net profit in Q1 FY26—a 23.7% jump YoY, and ROE that’s clocking a muscular 17.1%. Gross NPA down to 3.01%, and Net NPA is now a rounding error at 0.18%. Trades at 1.23x book, and with a P/E of 7.65, it’s basically giving away free returns.
2. Introduction with Hook
Imagine an uncle in a mundu who runs a 100m sprint in under 10 seconds. That’s Indian Bank—one of the most underrated PSU banks, looking like LIC but sprinting like Zerodha. This Q1, they posted nearly ₹3,000 Cr in profit, while your favorite fintech startup is still deciding which logo to use.
From 8.1% Gross NPA in 2022 to 3% now. That’s not cleanup—that’s detox on steroids.
3. Business Model (WTF Do They Even Do?)
They do what every bank does: take money from people who don’t need it and lend it to people who pretend they’ll pay back. In fancier terms:
- Treasury
- Corporate Banking
- Retail Banking
- Other Stuff™
But here’s the twist: they’re also going digital. Think UPI, mobile banking, API-based lending—all in a PSU shell. Basically, if SBI is Big B, Indian Bank is Pankaj Tripathi—calm, reliable, and lowkey lethal.
4. Financials Overview
| Metric (Q1 FY26) | Value |
|---|---|
| Revenue | ₹16,285 Cr |
| Net Interest Income (NII) | ₹6,361 Cr |
| Net Profit | ₹2,973 Cr |
| Gross NPA | 3.01% |
| Net NPA | 0.18% |
| ROE (TTM) | 17.1% |
Commentary:
NII is growing. NPAs are shrinking. Margins are strong. And profit? Steady as an FDR’s moustache.
5. Valuation
Fair Value Range: ₹700 – ₹780
- P/E Method: EPS (FY25) = ₹83.6. At 9x (fair for PSU with clean NPA book) → FV = ₹752
- P/B Method: Book Value = ₹531. At 1.4x → FV = ₹743
Current price: ₹652
Translation: Valuation still leaves room for upside—unless PSU stocks give you allergic reactions.
6. What’s Cooking – News, Triggers, Drama
- Q1 FY26 Result: ₹2,973 Cr PAT, 23.7% growth
- Asset Quality: Clean enough to pass a food safety test
- Digital Push: UPI, Internet Banking, AI-enabled services (yes, PSU banks using AI—don’t faint)
- Exceptional Item: ₹767 Cr hit due to associate amalgamation. Still beat expectations. Boss move.
Also, FII + DII holding inching up. Public shareholding, not so much. Because retail is still stuck on flashy fintechs.
7. Balance Sheet
| Metric (₹ Cr) | FY25 |
|---|---|
| Equity Capital | ₹1,347 |
| Reserves | ₹70,166 |
| Deposits | ₹7,37,098 |
| Borrowings | ₹41,552 |
| Other Liabilities | ₹26,875 |
| Total Assets | ₹8,77,039 |
Sturdy. Balanced. And not stuffed with imaginary assets.
8. Cash Flow – Sab Number Game Hai
| FY | CFO | CFI | CFF | Net Cash |
|---|---|---|---|---|
| FY23 | -₹27,894 | -₹314 | -₹1,543 | -₹29,751 |
| FY24 | -₹8,617 | -₹618 | ₹1,195 | -₹8,040 |
| FY25 | ₹17,396 | -₹348 | -₹4,264 | ₹12,784 |
From negative to net positive. Basically, cash flow did a full 180°. It’s now behaving.
9. Ratios – Sexy or Stressy?
| Ratio | FY25 |
|---|---|
| ROE | 17% |
| Gross NPA | 3.01% |
| Net NPA | 0.18% |
| CASA Ratio | ~40% (est) |
| Cost-to-Income Ratio | ~47% |
| Dividend Yield | 2.49% |
If these ratios were on Tinder, they’d be getting super likes from analysts. Clean asset book, strong returns.
10. P&L Breakdown – Show Me the Money
| FY | Revenue (Cr) | PAT (Cr) |
|---|---|---|
| FY23 | ₹44,985 | ₹5,574 |
| FY24 | ₹55,650 | ₹8,423 |
| FY25 | ₹62,039 | ₹11,264 |
This is PSU magic with an espresso shot. EPS doubled in 2 years. And it’s not a fluke—it’s fundamentals.
11. Peer Comparison
| Bank | P/E | ROE % | Gross NPA % |
|---|---|---|---|
| SBI | 9.7 | 17.2 | 2.4 |
| Canara Bank | 5.6 | 17.8 | 2.7 |
| BoB | 6.2 | 15.5 | 3.2 |
| Union Bank | 5.9 | 17.1 | 3.7 |
| Indian Bank | 7.7 | 17.1 | 3.0 |
Numbers look solid. Slightly premium on P/E, but better cleanliness score than most PSU rivals.
12. Miscellaneous – Shareholding, Promoters
| Stakeholders | Jun 2025 |
|---|---|
| Promoters (GoI) | 73.84% |
| FIIs | 4.54% |
| DIIs | 18.05% |
| Public | 3.56% |
Retail is still sleeping on this one. Meanwhile, DIIs and FIIs have already RSVP’d to the profit party.
13. EduInvesting Verdict™
Indian Bank is that silent kid in school who ends up topping the board exams. Clean asset quality, strong profitability, rising digital infra, and no drama—just quarterly consistency.
Verdict:
PSU power with private-sector polish. Not flashy, but quietly flexing all the right muscles.
Metadata:
Written by EduInvesting Team | July 25, 2025
Tags: Indian Bank, PSU Bank, Q1 FY26, Banking Stocks, EduInvesting Premium
