At a Glance
Bank of India (BOI) just dropped its Q1 FY26 results, flexing a 32% jump in net profit to ₹1,831 Cr, while advances grew 12% YoY. Asset quality is behaving (for now), with CRAR at a comfortable 17.4%. The stock trades at just 0.63x book and a laughably low P/E of 5.2, making it look like a bargain bin PSU stock. But beware—the contingent liabilities of ₹6.7 lakh Cr are lurking like a horror movie villain.
1. Introduction
Once written off as another PSU relic, BOI is back in the spotlight with improving profitability, asset quality, and capital ratios. But is this revival sustainable, or just a sugar high from treasury gains and one-off income? Investors are caught between juicy 3.6% dividend yields and memories of past write-offs.
2. Business Model (WTF Do They Even Do?)
BOI’s business is split into three boring-yet-crucial verticals:
- Treasury Operations: G-secs, forex, and other securities.
- Wholesale Banking: Loans to corporates and institutions.
- Retail Banking: Home, personal, and SME loans (the high-margin darling).
PSU banks make money by lending cheap deposits at higher rates, earning from treasury trades, and surviving on government bailouts when they screw up. Thankfully, BOI has been cleaning up its act.
3. Financials Overview
Q1 FY26 Highlights
- Net Profit: ₹1,831 Cr (+32% YoY)
- NII: ₹18,467 Cr (+8.3% YoY)
- Advances: ₹5.85 lakh Cr (+12% YoY)
- Deposits: ₹7.28 lakh Cr (+10% YoY)
- Net NPA: expected around 1% – low by PSU standards.
EPS: ₹4.02 for Q1; annualized P/E at dirt-cheap levels.
4. Valuation
- P/E: 5.2x – dirt cheap.
- P/B: 0.63x – the market doesn’t trust it yet.
- Fair Value Range: ₹100 – ₹140.
Cheap doesn’t always mean safe; PSU stocks have a habit of testing investor patience.
5. What’s Cooking – News, Triggers, Drama
- Asset Quality improving, NPAs under control.
- CRAR strong at 17.39%.
- Growth in advances and deposits beating industry average.
- Contingent Liabilities of ₹6.7 lakh Cr – elephants in the room.
- Regulatory Oversight: Always hanging like a sword.
6. Balance Sheet
| (₹ Cr) | Mar 2024 | Mar 2025 | Jun 2025 |
|---|---|---|---|
| Total Assets | 9,24,280 | 10,56,425 | 10,56,425 |
| Deposits | 7,40,611 | 8,19,806 | 8,19,806 |
| Borrowings | 80,960 | 1,23,869 | 1,23,869 |
| Net Worth | 70,581 | 80,725 | 80,725 |
Auditor’s Joke: “At least the balance sheet balances.”
7. Cash Flow – Sab Number Game Hai
| (₹ Cr) | Mar 2023 | Mar 2024 | Mar 2025 |
|---|---|---|---|
| Operating Cash | -7,045 | -4,437 | 18,534 |
| Investing Cash | -521 | -991 | -854 |
| Financing Cash | 541 | 3,868 | 34 |
Comment: Finally, positive operating cash flow—thank you rising interest rates!
8. Ratios – Sexy or Stressy?
| Ratio | 2023 | 2024 | TTM |
|---|---|---|---|
| ROE | 10% | 12% | 12.4% |
| ROA | 0.9% | 1.1% | 0.94% |
| NIM | ~3% | ~3.2% | ~3.3% |
| D/E | High | High | High |
Verdict: Improving, but still not sexy enough to woo FIIs.
9. P&L Breakdown – Show Me the Money
| (₹ Cr) | Mar 2023 | Mar 2024 | TTM |
|---|---|---|---|
| Revenue | 47,932 | 61,073 | 72,729 |
| Net Profit | 3,839 | 6,567 | 9,493 |
Comment: Profits have more than doubled in two years—PSU magic or RBI blessing?
10. Peer Comparison
| Bank | P/E | ROE | P/B |
|---|---|---|---|
| SBI | 9.5 | 17% | 1.46 |
| PNB | 6.8 | 15% | 0.94 |
| Canara | 5.4 | 17.7% | 0.95 |
| Bank of India | 5.2 | 12.4% | 0.63 |
Verdict: BOI is cheaper than peers but lags in ROE.
11. Miscellaneous – Shareholding, Promoters
- Promoters (GoI): 73.4%
- FIIs: 3.5%
- DIIs: 16%
- Public: 7.1%
12. EduInvesting Verdict™
Bank of India is slowly transforming from a PSU zombie to a profit machine. Low valuation, improving asset quality, and a strong capital base make it a tempting pick. However, contingent liabilities and government ownership keep it risky.
SWOT Analysis
- Strengths: Cheap valuation, rising profits, improving NPAs.
- Weaknesses: Low ROE vs peers, government control.
- Opportunities: Credit growth revival, rate cycle stability.
- Threats: NPA resurgence, global economic shocks.
Final Word: For value hunters who can handle PSU drama, BOI offers a high-risk, medium-reward play.
Written by EduInvesting Team | 29 July 2025
SEO Tags: Bank of India, PSU Banks, Q1 FY26 Results, Indian Banking Sector
