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Indian Bank
For 3QFY2011, Indian Bank registered net profit growth of 18.2% qoq and 11.3% yoy to
`491cr, above our estimates of `436cr, mainly on account of lower provisioning expenses.
NII grew by 18.9% yoy, which was slightly above our estimates. Non-interest income came in
lower by 12.3% qoq and 15.3% yoy to `249cr. Operating expenses declined by 10.1% qoq
and marginally by 0.3% yoy to `474cr. The cost-to-income ratio improved to 36.9% from
41.7% in 2QFY2011. The bank’s asset quality improved considerably with gross and net
NPAs in absolute terms declining by 16.8% qoq and 17.5% qoq, respectively. The gross and
net NPA ratios of the bank improved to 1.0% from 1.3% in 2QFY2011 and to 0.6% from
0.7% in 2QFY2011, respectively, with a provision coverage ratio of 83.0% including writeoffs
(83.3% in 2QFY2011). At the CMP, the stock is trading at 1.1x FY2012E ABV.
We maintain our Buy recommendation on the stock with a Target Price of `281.
India Equity Research Reports, IPO and Stock News Visit http://indiaer.blogspot.com/ for complete details �� ��
Indian Bank
For 3QFY2011, Indian Bank registered net profit growth of 18.2% qoq and 11.3% yoy to
`491cr, above our estimates of `436cr, mainly on account of lower provisioning expenses.
NII grew by 18.9% yoy, which was slightly above our estimates. Non-interest income came in
lower by 12.3% qoq and 15.3% yoy to `249cr. Operating expenses declined by 10.1% qoq
and marginally by 0.3% yoy to `474cr. The cost-to-income ratio improved to 36.9% from
41.7% in 2QFY2011. The bank’s asset quality improved considerably with gross and net
NPAs in absolute terms declining by 16.8% qoq and 17.5% qoq, respectively. The gross and
net NPA ratios of the bank improved to 1.0% from 1.3% in 2QFY2011 and to 0.6% from
0.7% in 2QFY2011, respectively, with a provision coverage ratio of 83.0% including writeoffs
(83.3% in 2QFY2011). At the CMP, the stock is trading at 1.1x FY2012E ABV.
We maintain our Buy recommendation on the stock with a Target Price of `281.
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