New Research Reports

Indian Bank (INBK) reported 2QFY25 PAT of INR27.06b (36% YoY, 6% beat), driven by lower provisions and higher other income.

Bank of Baroda (BoB) reported strong PAT beat at Rs52bn/RoA of 1.3%, mainly due to higher other income (led by treasury gains and recovery in TWO accounts), and partly offset by higher provisions (including contingent provisions).

Earnings significantly above estimates, grew by 23% y-o-y mainly driven by higher recoveries from written off accounts leading to higher RoA at 1.3%. Sustainable RoA trajectory remains at 1-1.1% for the bank.

Strong non-interest income (treasury and recovery) counterbalanced lower margins (due to penal charges reclassification), resulting in Union Bank of India’s decent operating performance and better RoA.

SBI, to its credit, has one of the lowest domestic LDR, strong LCR and a formidable regulatory retail deposit franchise. Together, these significantly bolster the bank from the systemic issue of slower deposit growth.

We recommend a BUY on the stock with a target price of Rs 275/share, implying an upside of 10% from the CMP.

Bank of Baroda (BOB) posted ~17% CAGR in loan growth over FY22-FY24 as it deployed excess liquidity on the balance sheet. Its CD ratio, thus, increased ~600bp over the past two years to 80.3%.

PSBs, including Indian Bank, have seen a correction in the recent past amid concerns around slowing growth (so also banking system) and peaking RoAs.