Indian Bank: No big surprises: Margins sustained; NPLs decline. :: Kotak Sec,

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Indian Bank (INBK)
Banks/Financial Institutions
No big surprises: Margins sustained; NPLs decline. Indian Bank reported strong
operating performance with margins maintained at 3.8% while earnings growth of
12% was ahead of expectations due to lower provisions. Gross NPL declining is positive,
especially given the higher slippages reported in 1QFY11. The stock is trading at 1.4X
FY2012E PBR; a premium to mid-tier PSU banks, given strong NIMs and RoE at 20%.
We maintain ADD, revising target price to `350 valuing the bank at 1.6X FY2012E PBR.