Buy This Mid Cap PSU Banking Stock For Target Price Of Rs 210 As Suggested By ICICI Direct

The brokerage firm ICICI Direct in its recent report recommended buy the stocks of Indian Bank, for a target price of Rs 210 apiece. The brokerage claims potential gains of 20% if the investors buy the stocks of the company at the current Market Price, they can expect the gains in 12 months.

Indian Bank is one of the largest and among the better performing Public Sector Bank (PSU) banks in India with a total business of over Rs 10.1 lakh crore. Pan-India presence with a strong branch network of 5721 domestic branches. Diversified loan mix with RAM (retail/Agri/MSME) forming ~61% to book.

Stock Outlook

22 August, on NSE, the Indian bank's stock closed at Rs 175, after a fall of 1.57%. The stock is currently trading Rs 59.9 above the 52 week low and Rs 19.95 below the 52 week high of the stock, respectively. The 52-week low of the stock is Rs 115.10 apiece recorded on August 24, 2021, and the 52-week high is Rs 194.95 apiece recorded on October 26, 2021.

Returns On Investments

Over a week, the stocks of the company gave negative returns of 4.065. In the past 1 month, the stocks gave a negative return of 1.88%. However, in the past 3 months, the shares gave a positive return of 11.22%. Over the 1 year, the stocks surged 43.86% giving a positive return. In the past 3 years, the stock surged roughly 4.6%. In the past 5 years, the stocks slid down massive compared to over the years. It slid down by 39.69% in 5 years.

Q1FY23 Results

Healthy operational performance; asset quality improves.

• Advances grew 9.1% YoY to Rs 425203 crore. Deposits up 8.2% YoY with CASA growth at 8% YoY.
• NII up 13.5% YoY, 6.6% QoQ. NIMs improved 23 bps QoQ at 3.1%.
• GNPA down 34 bps QoQ to 8.1%. R/s book declined 53 bps QoQ to ~4%

Key triggers for future price performance

Credit growth to be led by RAM segment, which will aid margins and earnings. Management guidance to keep credit cost of <2% and recovery from stressed assets provides comfort. Expect return ratios to improve gradually and, thus, aid valuations.

Brokerage suggests buy for a target price of Rs 210

Indian Bank's share price has given ~7% returns in the past three years. Improvement in credit growth outlook and asset quality with adequate capital position gives comfort. We maintain our BUY rating on the stock. "We value Indian Bank at ~0.7x FY24E ABV and revise our target price from Rs 180 to Rs 210 per share," the brokerage has said.

Disclaimer

The stock has been picked from the brokerage report of ICICI Direct. Greynium Information Technologies, the Author, and the respective Brokerage House are not liable for any losses caused as a result of decisions based on the article. Goodreturns.in advises users to check with certified experts before taking any investment decision.