01 — At a Glance
The Recovery Story Nobody Talks About
- 52-Week High / Low₹178 / ₹92.7
- TTM Revenue₹74,519 Cr
- Q3 FY26 Net Profit₹2,814 Cr
- Full-Year EPS (TTM)₹21.6
- Annualised EPS (Q3×4)₹24.72
- Book Value per Share₹190
- Price to Book0.84x
- Dividend Yield2.54%
- Debt / Equity11.5x
- Fitch RatingBBB-/Stable
The Turnaround Arc: Bank of India was India’s definition of “too big to fail and too broken to fix” until roughly FY21. Then something magical happened: they stopped bleeding and started printing cash. Q3 FY26 delivered ₹2,814 crore net profit, YoY growth of 6.66%, alongside a Gross NPA tumble to 2.26% (from 9.98% in FY22). The stock is up 63.8% in one year. Still, at 7.13x P/E vs sector median 8.09x, it trades at a 12% discount. Your government bank is cheaper than your junk-rated NBFC. Market efficiency, everyone.
02 — Introduction
Welcome to the Bollywood Ending Nobody Expected
Bank of India is India’s oldest narrative of institutional redemption. For a decade, it was the cautionary tale: massive NPA write-offs, recapitalisation after recapitalisation, ROE barely positive, and concalls where management danced around the word “crisis” like it was Biggie Smalls’ diss track.
Then came FY21. Something shifted. The losses stopped. The asset quality stabilized. By FY25, the bank had posted ₹9,552 crore net profit — a number it hadn’t touched since FY19. Q3 FY26 extended that victory lap with ₹2,814 crore quarterly profit, a 6.66% YoY surge, and NPA ratios that actually look respectable: Gross 2.26%, Net 0.60%.
The sixth-largest public sector bank is now on a credible growth trajectory. Advances are up 13.63% YoY (₹7.40 lakh crore). Deposits up 11.64% (₹8.87 lakh crore). NIM improved 16 bps QoQ to 2.57%, thanks to portfolio churn (shedding low-yield AAA PSUs and repo-linked assets, replacing with higher-spread loans). The bank is even launching products for gig workers and solar farmers — because apparently, disruption is now a PSU sport.
But there’s a catch. This recovery happened at a time when the banking system faced a structural shift: CASA deposits are tanking (lowest level in years), credit-deposit ratios are creeping into red zones, and deposit repricing is killing margins. For a bank like BoI, which struggles with CASA discipline anyway (CASA ratio at 37.97%, below peers), the headwind is material.
Q3 Concall Summary (Jan 2026): Management described a “transformational shift, structural shift” in deposits. Retail is shifting balances away from savings into real estate, equities, mutual funds, insurance. CEO explicitly: “there will be pressure on CASA definitely for the entire banking system.” Translation: This is systemic, not a BoI problem. But BoI feels it more than others.
03 — Business Model: WTF Do They Even Do?
It’s Banking. Boring, Essential, PSU Banking.
Bank of India does three things: 1) Takes deposits from your grandmother’s Fixed Deposit account. 2) Lends to corporations, MSMEs, farmers, and gig workers. 3) Makes money on the spread. Occasionally, it trades bonds, manages portfolios, and charges fees. Nothing revolutionary. No blockchain, no IPOs (though they did take a 7.09% stake in ki Mobility). Just old-fashioned financial intermediation.
The deposit base: ₹8.87 lakh crore as of Q3 FY26, up 11.64% YoY. CASA (Current Account Savings Account): 37.97%, a chunk that’s been eroding for three years. Retail term deposits: 44.5% (growing). Bulk deposits: 15.5% (also growing, driven by short-tenor tactical funding for liquidity). Management’s big insight: bulk deposits have a higher cost than retail term deposits (because 7–15 day tenors are expensive). This is counterintuitive but true.
The advance book: ₹7.40 lakh crore (₹6.29 lakh domestic). Mix is 58.54% Retail-Agriculture-MSME (RAM), 41.46% corporate and others. RAM grew 18.05% YoY (management cited retail ~20%, agri ~16%, MSME ~15% internally). Corporate also grew 11% “in trying times.” This RAM push is deliberate — higher-yielding, lower-concentrated, less cyclical.
Advances Growth+13.63%YoY to ₹7.40 lakh Cr
Deposits Growth+11.64%YoY to ₹8.87 lakh Cr
Net NPA Ratio0.60%Down 25bps YoY
Credit Cost0.34%Down 5bps YoY
The BOI@125 Strategy (5-year vision): Target RAM at 65% of advances, corporate at 35%. International business at 15–16% of global advances. This is portfolio shift, not growth acceleration. It means shedding low-yield assets and replacing with higher-spread lending. Mix engineering, basically.
💬 Why do you think a PSU bank is more aggressive on gig economy lending than most private banks? Drop your thoughts!
04 — Financials Overview
Q3 FY26: The Numbers
Result type: Quarterly Results (Q3 FY26) | Q3 EPS: ₹6.18 | Annualised EPS (Q3×4): ₹24.72 | TTM EPS: ₹21.6
| Metric (₹ Cr) |
Q3 FY26
Dec 2025 |
Q3 FY25
Dec 2024 |
Q2 FY26
Sep 2025 |
YoY % |
QoQ % |
| Interest Income | 12,504 | 12,166 | 12,530 | +2.8% | -0.2% |
| Net Interest Income | 6,461 | 6,094 | 6,117 | +6.0% | +5.6% |
| NII Margin % | 2.57% | 2.41% | 2.41% | +16 bps | +16 bps |
| Non-Interest Income | 2,279 | 1,751 | 2,218 | +30.1% | +2.8% |
| Net Profit | 2,814 | 2,638 | 2,576 | +6.66% | +9.2% |
| EPS (₹) | 6.18 | 5.79 | 5.66 | +6.7% | +9.2% |
P/E Recalculated: TTM EPS ₹21.6 ÷ CMP ₹160 = P/E 7.41x (screener shows 7.13x, minor rounding). Annualised EPS (Q3×4) ₹24.72 ÷ ₹160 = 6.48x (deeply undervalued on forward earnings). Industry median P/E is 8.09x. BoI trades at an 12% discount. The “recovery story” premium doesn’t exist yet. Either the market doesn’t believe the NPA improvements are sticky, or PSU bank discounts are structural.
05 — Valuation: Fair Value Range
What Should A PSU Bank Cost?
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