Earnings Outlook
Drop in provisions seen lifting Indian Bk's PAT 25% on yr
This story was originally published at 13:18 IST on 29 April 2025
Register to read our real-time news.Informist, Monday, Apr. 28, 2025
By Pratiksha
NEW DELHI – Indian Bank's net profit is seen rising on year in the March quarter due to an on-year decline in provisions and an improvement in asset quality. According to an average of estimates of six brokerages, the Chennai-based bank's net profit may rise 24.6% on year to INR 28.01 billion for the quarter ended March.
The bank reported a net profit of INR 22.47 billion a year ago and INR 28.52 billion in the previous December quarter. The estimates for net profit of the bank in Jan-Mar range from INR 27.22 billion to INR 28.55 billion. The lender is scheduled to announce its earnings for the March quarter on Saturday.
Motilal Oswal Financial Services Ltd. expects the state-owned bank's provisions to drop 27.2% on year to INR 9.1 billion from INR 12.5 billion in the corresponding quarter a year ago. Provisions, excluding tax, and contingencies fell 21.5% on year to INR 10.59 billion in Oct-Dec.
The bank's asset quality is expected to improve in the reporting quarter, boosting the bottom line, according to some brokerage firms. Phillip Capital Pvt. Ltd. expects the state-owned bank's gross non-performing asset ratio to decline to 3.0% as of Mar. 31, as compared to 3.26% as of Dec. 31 and 3.95% as of March-end of 2024. The net non-performing asset ratio is seen at 0.2% as of Mar. 31, broadly unchanged from 0.21% at the end of the previous quarter and down from 0.43% at the end of March 2024.
A steady growth in advances is also seen supporting the lender's bottom line. Indian Bank reported gross advances of INR 5.88 trillion as of Mar. 31, up 10.1% on year, as per provisional data by the lender. Sequentially, the gross advances were up 5.2%. Total deposits of the bank were up 7.1% on year and 5% on quarter at INR 7.37 trillion as of Mar. 31. Indian Bank expects deposits and loans to grow 8-10% and 11-13%, respectively, in 2024-25 (Apr-Mar), the lender's senior management said in a post-earnings call with analysts in January.
The bank's net interest income is seen rising 9.0% on year to INR 65.59 billion in the quarter ended March, according to the average of estimates of six brokerages. The estimates for net interest income in the quarter range from INR 64.88 billion to INR 66.70 billion.
"NII (net interest income) growth will be slightly slower then average loan growth due to fall in yield on advances outpacing cost of deposits. Consequently, NIM (net interest margin) will be slightly lower sequentially," YES Securities said in a pre-earnings report.
Most brokerages expect the lender's net interest margin to decline on a sequential basis in Jan-Mar. Emkay Global Financial Services expects net interest margin to fall to 3.40% in Jan-Mar, against 3.45% in Oct-Dec and 3.52% a year ago. The bank's management had said in an analyst conference call in January that it expects to maintain net interest margin at 3.4-3.5% in FY25.
The public-sector bank's slippages are expected to be higher on a sequential basis due to agriculture non-performing assets, as per Emkay Global Financial Services. The bank recognised fresh slippages worth INR 10.04 billion in Oct-Dec, against INR 14.29 billion a year ago.
At 1230 IST, shares of Indian Bank were 0.8% lower at INR 581.40 on the National Stock Exchange.
Following are the Jan-Mar earnings estimates for Indian Bank based on reports from six brokerage firms in descending order by the estimate of net profit:
Brokerage firm | NII (in INR million) | Net profit(in INR million) |
Motilal Oswal Financial Services Ltd. | 65,424.00 | 28,550.00 |
Emkay Global Financial Services Ltd. | 65,365.00 | 28,498.00 |
Anand Rathi Share and Stock Brokers Ltd. | 66,701.00 | 28,401.00 |
| PhillipCapital (India) Pvt Ltd. | 64,883.00 | 27,688.00 |
YES Securities (India) Ltd | 65,754.00 | 27,686.00 |
| Dolat Capital Market Pvt Ltd | 65,430.00 | 27,222.00 |
Average | 65,592.83 | 28,007.50 |
End
IST, or Indian Standard Time, is five-and-a-half hours ahead of GMT
Edited by Tanima Banerjee
For users of real-time market data terminals, Informist news is available exclusively on the NSE Cogencis WorkStation.
Cogencis news is now Informist news. This follows the acquisition of Cogencis Information Services Ltd by NSE Data & Analytics Ltd, a 100% subsidiary of the National Stock Exchange of India Ltd. As a part of the transaction, the news department of Cogencis has been sold to Informist Media Pvt Ltd.
Informist Media Tel +91 (11) 4220-1000
Send comments to feedback@informistmedia.com
© Informist Media Pvt. Ltd. 2025. All rights reserved.
To read more please subscribe
Share this Story:
