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Informist, Saturday, Apr. 25, 2026

By Pratiksha

NEW DELHI – Indian Bank's net profit is seen rising slightly on year in the March quarter due to healthy growth in net interest income and advances, according to brokerages tracking the lender. However, a sharp fall in treasury income may eat into the lender's bottom line, analysts said. 

The Chennai-based bank's net profit is expected to rise 6% on year and 3% on quarter to INR 31.38 billion for the March quarter, according to the average of estimates from five brokerage firms. YES Securities Ltd. has the lowest estimate for Indian Bank's net profit for the March quarter at INR 30.78 billion while Motilal Oswal Financial Services Ltd. has the highest estimate at INR 32.59 billion. The bank will detail its March quarter earnings on Wednesday.

The bank's net interest income – the difference between interest earned and expended – is seen rising 11% on year to INR 70.64 billion in the March quarter, according to the average of estimates from five brokerages. The estimates for net interest income in the quarter range from INR 70.31 billion to INR 71.37 billion. "NII growth will be slightly higher than average loan growth due to rise in yield on advances outpacing cost of deposits," YES Securities said in a report. 

Indian Bank's advances grew 13.6% on year to INR 6.68 trillion as of Mar. 31, according to the provisional figures released by the bank earlier this month. "We expect steady business momentum with 3-4% QoQ (quarter-on-quarter) loan growth, in line with industry trends," Elara Securities said in a note. Brokerage Motilal Oswal expects Indian Bank's credit growth to be backed by retail and micro small and medium enterprises segment. 

The public-sector bank had said in January it has a strong corporate loan pipeline of about INR 500 billion and aims to sustain its current pace of credit growth into 2026-27 (Apr-Mar). In August, the lender said it expects to achieve loan growth of 10-12% and deposit growth of 8-10% in FY26. 

However, losses in treasury income are expected to be a pain point for the bank in the March quarter, according to brokerages. Elara Securities expects Indian Bank's treasury income to fall 32% on year and 71% on quarter to INR 1.47 billion in the March quarter. "(We expect) rise in bond yields to limit treasury income, while RoA (return on assets) to sustain at 1.4%," Motilal Oswal Financial Services said in a note. 

On Thursday, Informist reported citing a senior Indian Bank official that in Jan-Mar the lender faced some challenges in managing its treasury book due to mark-to-market losses from a sharp rise in government bond yields and the Reserve Bank of India's regulatory measures in the foreign exchange segment. The RBI had rolled out regulatory measures to curb volatility in the exchange rate, including putting a cap of $100 million on onshore net open positions of banks. In March, the 10-year bond yield rose almost 37 bps after Israel and the US launched an aerial attack on Iran on Feb. 28.

Brokerages have a mixed view on the state-owned bank's net interest margin for the March quarter. While both Elara Securities and Motilal Oswal Financial Services expect it to fall to around 3.25% in the March quarter from 3.28% in the previous quarter, YES Securities expects it be "slightly higher sequentially."

Brokerages will keep an eye on the bank's guidance for FY27 loan and deposit growth and net interest margin trajectory. Shares of the lender have risen almost 1.5% since it declared earnings for the December quarter on Jan. 22. On Friday, shares of the bank closed 0.6% lower at INR 909.90 on the National Stock Exchange. 

Brokerages have a mixed view on the bank's stock, with six recommending a 'buy' with an average target price of INR 966 per share. Two brokerages have a 'hold' call with target prices ranging from INR 880 to INR 950, while one has recommended selling the stock with a target price of INR 800. 

The following are the Jan-Mar earnings estimates for Indian Bank from five brokerages in descending order of the estimate of net profit in INR billion:

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Edited by Deepshikha Bhardwaj

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