Indian Bank is a public-sector bank which offers banking and financial services in India. It offers its products across various segments such as personal, corporate, agriculture, business, NRI, et cetera.
The market capitalisation of Indian Bank, as of August 22, 2018, was close to Rs.16,000 crore.
Company’s Wealth and Recent Performance
- For the quarter ended on June 30, 2018, the company’s Net Interest Income grew by 23.8% y-o-y from Rs.1,460 crore to Rs.1,807 crore. Considering the Interest Income for the period, it improved by a little over 13% y-o-y from Rs.4,136 crore to Rs.4,692 crore.
- Considering the operating profit for the Q1 FY19, it was up by 3.6% - from Rs.1,298 crore to Rs.1,252 crore. At the same time, the bank’s total balance sheet grew by 14.4% y-o-y - Rs.2,50,754 crore.
- However, the net profit for the period stood at Rs.209.32 crore - a reduction of more than 40% with respect to the same quarter of the previous year. This drastic reduction in net profit came on the account of a sizeable increase in provisions and contingencies. The figure for the quarter stood at Rs.1,297.5 crore as against Rs.715.5 crore reported for the Q1 FY18.
- Coming to the asset quality for the June quarter, the Gross Non-performing assets (NPA) stood at 7.20% as against 7.37% reported for the March quarter. As for the Net NPA, it witnessed a minuscule reduction q-o-q from 3.81% to 3.79%.
Indian Bank Stock Trends in 2018
- On January 2, 2018, the opening stock price of Indian Bank was Rs.376.25 on the National Stock Exchange. Over the course of the first three weeks, the share price rose to touch the Rs.400 mark, although this rally was short lived. The stocks ended up shedding those gains in the final week of the month with the closing price on January 31 being Rs.362.60.
- The scrip lost more than 15% in the month of February, driven mainly by the turbulence in the international markets. This bearish run was seen in the first week of March as well with the stock price eventually descending into the Rs.200 region. However, the shares recovered slightly in the final week of March to end the month at Rs.299.80.
- Through the course of April and May, the share price of Indian Bank was seen fluctuating at levels varying from Rs.302 - Rs.350. The stocks continued to go to through their usual pattern of ups and downs, although the share price remained above the Rs.300 mark.
- It wasn’t until the first week of June that the prices rose handsomely. The scrip improved by close to 20% in a span of 10 days to touch the Rs.370 mark. However, over the course of the next few weeks, the Indian Bank stock price dropped gradually to reach its previous levels at Rs.320.
- Towards the end of July, the shares commenced another bull run which took the price close to the Rs.370 mark again. However, as of late August, the stock had been on a downward path and was trading at levels around Rs.330.
Indian Bank Stock Trends in 2016 and 2017
- At the start of 2016, the share price of Indian Bank was at levels around Rs.115. Over the course of first two months, the price lost more than 20% and descended onto the levels close to Rs.75. However, the prices recovered in March to ascend back into the Rs.100 region.
- Through the months of April and May, the stock price changed at levels mainly between Rs.90 - Rs.100. However, in June, the shares gained more than 35% to end the month at Rs.141.20. In the same month, the company also announced a final dividend of 15%.
- The stocks continued their upward run in the months of July and August as well. On the back of positive developments in the bank, the investors enjoyed excellent gains in this period. In the second half of August, the scrip had crossed the psychologically important mark of Rs.200, with the closing price at the end of the month being Rs.224.
- Things didn’t change drastically for the remainder of the year. The stock price of Indian Bank fluctuated at levels mainly around Rs.210 - Rs.250. In the final weeks of the year, the scrip lost a little over 5% to end 2016 at Rs.220.85. Since the start of the year, the stocks had managed to deliver more than 90% returns.
- 2017 was another landmark year for the Indian Bank shareholders. The stocks commenced the year trading at Rs.220. By early February, the scrip was up by a little over 45% and as a result, the shares were being traded at levels above Rs.300. However, this newly found success was soon followed by a gradual decline through March and most of April.
- The share price rose once again in the final week of April - this time, to soar beyond the Rs.350 mark by early May. The shares in this period gained a little over Rs.100, although this sharp rise was once again followed by a moderate decline in the prices. By late June, the shares were back to their previous levels at Rs.280 - Rs.290. A final dividend of 60% was also announced in the month.
- This bearish trend was observed all the way from July to most of October. In this period, the scrip lost close to 5% but it managed to hold its bearings at levels above Rs.270. In October, there was a sharp spike in the stock price of Indian Bank.
- Driven by favourable developments, the shares managed to gain more than 60% in roughly a month weeks to cross the Rs.400 mark in November. For a couple of weeks, the shares were traded at levels above Rs.400. The scrip also managed to reach its 52-week high at Rs.427.40. However, the prices declined slightly towards the end of the year to close at Rs.376.70.
Should you invest in Indian Bank?
- Indian Bank is a public sector bank based in Chennai, India. Owned by the Government of India, the bank has been in the business for more than 100 years and provides a wide range of banking and financial services.
- Considering the financial performance of the company, for the year ended on March 31, 2018, Indian Bank reported its net profit to be at Rs.1,258.9 crore. For the June quarter of the FY19, its net profit was disclosed to be at Rs.209.3 crore. This marked a sizeable reduction in profit with respect to the figure reported for the same quarter of the previous year. This drop came on the account of an increase in provisions and coverage.
- Comparing the performance of the bank with its peers in the public banking sector, Indian Bank ranks considerably lower in terms of net interest income and total assets. However, if we are to purely consider the net profit, Indian Bank is among the very few banks in the sector which reported a profit for the FY18.
- The same positive trend was seen in the company’s stock as well. In 2016, the stock delivered returns worth more than 80% while in 2017, the returns delivered were as much as 60%. The scrip started 2018 on a rather bearish note, although as of August 2018, it was one of the better-performing stocks in the Nifty 200. It was not trading close to its 52-week low and since March 2018, the scrip has appreciated by more than 15%.
- It may be a feasible idea to invest in this particular stock, although at its present levels, it may seem too expensive. You can choose to accumulate this scrip at dips. Whatever may be the case, it is strongly recommended that you do your own research before investing.
Indian Bank is a public sector bank owned by the Government of India. It offers a wide range of banking and financial services such as deposits, loans, insurances, credit and debit cards, wealth management, remittance, et cetera. It operates in various segments, ranging from personal and corporate to retail, agriculture, NRI and even small and medium sized enterprises. As of March 2018, the bank has more than 2,800 branches through which it offers its core banking solutions. In addition to this, Indian Bank has a strong international presence with more than 220 overseas correspondent banks in 75 countries.
History of the Company
Indian Bank was incorporated on March 5, 1907 under the Indian Companies Act, 1882, as Indian Bank Limited. The bank formally commenced its business on August 15, 1907, in Chennai (then known as Madras). In 1932, the bank opened its first overseas branch in Colombo, Sri Lanka and in 1941, it opened its Singapore branch. Subsequently, in a bid to expand its operations, Indian bank acquired the businesses of other banks such as Trichy United Bank, Salem Bank, et cetera in 1962. The bank was subsequently nationalised in 1969. The 1990s witnessed restructuring within the bank to overcome the financial setbacks incurred by the bank.
Management of the Company
Mr. A. S. Rajeev - Executive Director
Mr. Rajeev presently serves as the Executive Director of Indian Bank. He has held this position since January 2016 and prior to joining the organisation, he worked with the Vijaya Bank in the capacity of General Manager and Chief Financial Officer. He is a member of the Institute of Chartered Accountants of India and is considerably experienced in the fields of finance, taxation and accounts, planning and development, and international banking. He has also been associated with Syndicate Bank.
Mr. M. K. Bhattacharya - Executive Director
Mr. M. K. Bhattacharya presently serves as an Executive Director of Indian Bank - a position he has held since February 2017. Prior to this, he was associated with the State Bank of Travancore where he worked as the General Manager of Business Strategy & Rural Banking. He also served as the bank’s Chief Risk Officer and General Manager of Risk Management. He joined the State Group in 1985 as a Probationary Officer and formally started his career with the State Bank of Mysore. Over the years, he rose through the ranks and eventually became the Assistant General Manager of the bank. Thereafter, he moved to State Bank of Hyderabad and then to State Bank of Travancore. In his impressive tenure with the State Group, he has held various leadership positions at different levels.
Mr. K. Udaya Bhaskara Reddy - General Manager of RMD and CRO
Mr. K. Udaya Bhaskara Reddy currently serves as the General Manager of ISSD & CMC, RMD and CRO at Indian Bank. From May 2017 to June 2018, he was responsible only for ISSD & CMC as the General Manager. Prior to his appointment to the present post, he served as the Zonal Manager and General Manager of the Kolkata Division at Indian Bank. In addition to this, he has also served as a Director at the Ind. Bank Housing Limited and Non-Executive Nominee Director of Indbank Merchant Banking Services Limited.
Indian Bank Listings in NSE, BSE, and Stock Market Indices
The equity shares of Indian Bank are available to the general public for trading. They are listed on the country’s two prominent stock exchanges - the National Stock Exchange of India Limited and the Stock Exchange, Mumbai. The respective codes for the same are as follows:
- NSE Code: INDIANBEQ
- BSE Code: 532814
- ISIN: INE562A01011
- Sector: Banks, Public Sector
Considering the stock market indices, the company comprises the following:
- Nifty 200
- Nifty 500
- Nifty Dividend Opportunities 50
- Nifty High Beta 50
- Nifty PSU Bank
- S&P BSE AllCap
- S&P BSE Enhanced Value
- S&P BSE MidSmallCap
- S&P BSE PSU
- S&P BSE Finance
- S&P BSE 500
Post Box No. 5555
254-260, Avvai Shanmugam Salai
Royapettah, Chennai - 600-0014
Tamil Nadu, India
Contact number: 044-2813-4300
Stocks vs. Mutual Funds: here's what we recommend
Stock market investments require a lot of research and knowledge. They do not generally offer any tax benefits and are regarded as high-risk investments. Hence,it is crucial to have a diversified portfolio. At Bankbazaar, we encourage our readers to invest on mutual funds.It doesn't require a lot of knowledge and equity linked mutual fund schemes offer tax benefits. Additionally, since mutual funds comprise stocks from multiple companies, they help in building a diversified portfolio.
The contents of this post/blog does not constitute financial or other professional advice nor does it imply in any manner a principal-agent relationship, and is not a professional advice on a specific financial matter.