BQ Prime’s special research section collates quality and in-depth equity and economy research reports from across India’s top brokerages, asset managers and research agencies. These reports offer BQ Prime’s subscribers an opportunity to expand their understanding of companies, sectors and the economy.
Dolat Capital Report
Indian Bank reported healthy profitability metrics, benefitting from higher net interest margin, better than expected other income and lower opex. Core pre-provision operating profit margin strengthened to 2.1% for the quarter.
Slippages at 3.1% improved QoQ but remained elevated led by continued stress from micro, small and medium enterprise book, resulting in credit costs of 2% for the quarter.
Headline asset quality strengthened with 30 bps sequential moderation in gross non-performing asset ratio to 8.1% and stable provision coverage ratio at 75%. However, restructured book at ~4.5% is higher versus peers (~2.5%) and delinquencies from the MSME book have remained high even as corporate stress has declined materially.
This is partly due to Indian Bank’s higher share of MSME loans at 18% of advances.
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