Public Sector Bank Stock Gave Over 400% In 3 Yrs, Buy For Upto 41% Return, Says Emkay Global

Emkay Global has come up with an investing idea in Public Sector Bank (PSB), namely Indian Bank. The brokerage has assigned a "Buy" on the stock with a target price of Rs 375/share. It sees a potential upside of 41% in 12 months if purchased at the current market price. Indian Bank is a leading Midcap PSB in India having a market capitalisation of Rs 33,134.96 crore. Check below for key takeaways:

Stock Performance, 52-Week High/Low, & Returns

The stock of Indian Bank last traded at Rs 266.05/share, down 2.51% from its previous close. The stock traded its 52 week high on 1 February 2022 at Rs 310/share and 52 week low on 12 May 2022 at Rs 137.05/share, respectively.

The stock has fallen 5.79% in 1 week, and 7.28% in 1 month, respectively. However, it gained 69.95% in 1 Year and 407.73% in 3 years, respectively. It has fallen 7.86% in 5 years.

Focused on profitability vs growth; wellcapitalized among PSBs

Emkay Global said, "We expect the bank to report 0.8% RoA in FY23E and reach 1% by FY24E/FY25E, led by a healthy margin trajectory, improving fees (incl. PSLC) and normalization of credit cost (1.1-1.2%, from a high of >2%). Additionally, Indian Bank is one of the few PSBs to remain well capitalized, with CET 1 at 13.2% (including 9MFY23 profit), thus posing no risk of equity dilution for investors, unlike peers."

It added, "The current MD & CEO's term is till Sep-2024, post which he will be eligible for a 2-year extension before superannuation. We retain a BUY on the stock, with TP of Rs375/share (0.8x FY25E ABV)."

Disclaimer

The stock has been picked from the brokerage report of Emkay Global. 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 consult with certified experts before making any investment decision.