Indian Bank: Performance Highlights

1QFY2012 Result Update | Banking
August 9, 2011
Indian Bank
ACCUMULATE
Performance Highlights
CMP
Target Price
Particulars (` cr)
1QFY12
4QFY11
% chg (qoq)
1QFY11
% chg (yoy)
1,030
1,111
(7.3)
927
11.2
Pre-prov. profit
781
903
(13.5)
838
(6.8)
PAT
407
439
(7.3)
368
10.5
NII
`213
`232
Investment Period
12 Months
Stock Info
Sector
Banking
Market Cap (` cr)
Source: Company, Angel Research
For 1QFY2012, Indian Bank reported a decline of 7.3% qoq in its net profit to
`407cr, mostly in-line with our estimates. Healthy growth momentum combined
with stable asset quality was the key highlight of the result. We recommend an
Accumulate rating on the stock.
Strong growth in business; Asset quality remains stable: Net advances for the
bank grew strongly by 9.6% qoq and 21.3% yoy to `85,510cr, while deposits
grew by 4.4% qoq and 21.3% yoy to `110,425cr. CASA ratio as of 1QFY2012
stood at 31.0%, up 20bp from 30.8% in 4QFY2011. The effect of rising interest
rates was felt in 1QFY2012, with cost of deposits increasing by 90bp qoq to
7.2%. However, yield on advances increased by 101bp qoq to 10.9%, leading to
a sequential increase of 11bp in reported NIM to 2.5%. During the quarter,
non-interest income decreased by 8.2% qoq (down 29.9% yoy) to `249cr.
Treasury income was strong at `47cr (`5cr in 4QFY2011), while income from
recoveries was weak at `19cr (`89cr in 4QFY2011). For 1QFY2012, the banks
operating expenses increased by 3.9% qoq to `498cr, driven by a 16.0%
sequential rise in employee expenses to `359cr.
Outlook and valuation: The banks relatively higher rural and semi-urban
presence has enabled it to maintain reasonable cost of funds, resulting in more
resilient NIMs than other mid-size PSU banks. At the CMP, the stock is trading at
5.4x FY2013E EPS of `39.8 and 0.9x FY2013E ABV of `244.3, which is below
our target multiple of 1.0x FY2013 ABV. Hence, we recommend an Accumulate
rating on the stock with a target price of `232, implying a 9.0% upside from
current levels.
9,154
Beta
1.1
52 Week High / Low
317/197
Avg. Daily Volume
28,387
Face Value (`)
10
BSE Sensex
16,858
Nifty
5,073
Reuters Code
INBA.BO
Bloomberg Code
INBK@IN
Shareholding Pattern (%)

Promoters
80.0
MF / Banks / Indian Fls
4.2
FII / NRIs / OCBs
10.0
Indian Public / Others
Abs. (%)
5.8
3m
1yr
3yr
Sensex
(9.0)
(7.8)
11.1
Indian Bank
(8.0)
(8.2)
83.1
Key financials
Y/E March (` cr)
NII
% chg
FY2010
FY2011
FY2012E
FY2013E
3,161
4,036
4,166
4,434
21.2
27.7
3.2
6.4
1,555
1,714
1,625
1,748
24.9
10.2
-5.2
7.6
NIM (%)
3.5
3.7
3.3
3.0
EPS (`)
35.1
38.8
36.9
39.8
P/E (x)
6.1
5.5
5.8
5.4
P/ABV (x)
1.4
1.2
1.0
0.9
RoA (%)
1.7
1.5
1.2
1.2
RoE (%)
25.6
23.5
19.0
17.8
Net profit
% chg
Please refer to important disclosures at the end of this report
Vaibhav Agrawal
022 3935 7800 Ext: 6808
vaibhav.agrawal@angelbroking.com
Shrinivas Bhutda
022 3935 7800 Ext: 6845
shrinivas.bhutda@angelbroking.com
Varun Varma
022 3935 7800 Ext: 6847
varun.varma@angelbroking.com
Indian Bank | 1QFY2012 Result Update
Exhibit 1: 1QFY2012 performance

Particulars (` cr)
1QFY12 4QFY11
Interest earned
2,781
2,594
Interest expenses
1,751
NII
1,030
Non-interest income
Operating income
% chg (qoq) 1QFY11
% chg (yoy)
7.2
2,122
31.1
1,483
18.1
1,195
46.5
1,111
(7.3)
927
11.2
249
272
(8.2)
355
(29.9)
1,279
1,383
(7.5)
1,282
(0.2)
Operating expenses
498
480
3.9
444
12.1
Pre-prov. profit
781
903
(13.5)
838
(6.8)
Provisions & cont.
177
127
39.6
344
(48.5)
PBT
604
776
(22.2)
494
22.3
Prov. for taxes
197
337
(41.5)
126
56.8
PAT
407
439
(7.3)
368
10.5
(7.3)
4.4
10.5
EPS (`)
4.9
5.3
Cost-to-income ratio (%)
38.9
34.7
34.7
Effective tax rate (%)
32.6
43.5
25.5
0.5
0.5
0.8
Net NPA (%)

Exhibit 2: 1QFY2012 actual vs. Angel estimates

Particulars (` cr)
Actual
Estimates
Var. (%)
NII
1,030
1,112
(7.4)
Non-interest income
249
273
(8.8)
1,279
1,385
(7.6)
Operating expenses
498
481
3.5
Pre-prov. profit
781
904
(13.6)
Provisions & cont.
177
287
(38.3)
PBT
604
617
(2.1)
Prov. for taxes
197
200
(1.5)
PAT
407
417
(2.4)
Operating income
August 9, 2011
Growth momentum continues; though NIM declines 43bp qoq

Net advances for the bank grew strongly by 9.6% qoq and 21.3% yoy to
`85,510cr, while deposits grew by 4.4% qoq and 21.3% yoy to `110,425cr. CASA
deposits grew by healthy 4.8% qoq and 15.0% yoy to `34,220cr. CASA ratio as of
1QFY2012 stood at 31.0%, up 20bp from 30.8% in 4QFY2011. Bulk deposits
including CDs constituted 16.5% of overall deposits as of 1QFY2012.
The effect of rising interest rates was felt in 1QFY2012, with cost of deposits
increasing by 90bp qoq to 7.2%. However, yield on advances increased by 101bp
qoq to 10.9%, leading to a sequential increase of 11bp in reported NIM to 2.5%.
Management has guided for NIM of ~3.5% for FY2012.
The bank opened 32 branches and 51 ATMs during 1QFY2012. The bank is
focusing on increasing both its retail side assets and liabilities going forward and
plans to grow its loan book at 34% above the system growth for FY2012.
Exhibit 3: Corporate and overseas credit driving advances growth

Segment (` cr)
1QFY12 4QFY11
Agriculture
% chg (qoq) 1QFY11
% chg (yoy)
11,638
11,048
5.3
10,433
11.5
9,638
9,681
(0.4)
8,666
11.2
45,768
39,915
14.7
34,963
30.9
3,367
3,138
7.3
2,959
13.8
Retail
12,100
11,944
1.3
11,006
9.9
Gross advances
82,511
75,726
9.0
68,027
21.3
SME
Corporate
Overseas credit
10.0
73.2
8.0
6.0
71.1
70.9
1QFY11 2QFY11 3QFY11 4QFY11 1QFY12

August 9, 2011
74.0
32.0
72.0
31.0
70.0
30.0
68.0
29.0
9.6
4.4
1.8
4.7
6.5
3.1
2.1
7.7
2.0
8.6
6.7
4.0
76.0
CASA yoy growth (%, RHS)

40.0
29.6
27.4
30.0
22.7
15.1
15.0
31.0
74.7
CASA ratio
33.0
30.8
74.8
CDR (%, RHS)
32.0
12.0
Dep. qoq chg (%)
32.2
Adv. qoq chg (%)
Exhibit 5: CASA ratio stable at 31%
32.7
Exhibit 4: Strong business growth during 1QFY2012
20.0
10.0
-

Exhibit 7: 32 branches opened during the quarter

Branches
1,128
1,900
1,850
3.50
3.43
3.40
1,800
1,750
3.30
1,700
3.20
1,650
1QFY11
2QFY11
3QFY11
4QFY11
1QFY12
1,064
1,100
1,050
1,010
1,822
3.60
1,200
1,150
1,085
1,803
3.70
1,863
3.76
3.71
ATMs (RHS)
1,179
1,950
1,762
3.80
3.86
3.84
3.90
1,895
Exhibit 6: Sharp drop in reported NIM for 1QFY2012
1,000
950
900

Non-interest income weak for 1QFY2012

During the quarter, non-interest income decreased by 8.2% qoq (down 29.9% yoy)
to `249cr. Treasury income was strong at `47cr (`5cr in 4QFY2011), while income
from recoveries was weak at `19cr (`89cr in 4QFY2011). The technically
written-off book of the bank as of FY2011 stands at ~`1,800cr, which is expected
to keep recoveries healthy going forward.
Asset quality remains stable

For 1QFY2012, the banks gross and net NPAs in absolute terms increased by
8.9% qoq and 5.7% qoq, respectively. Gross and net NPA ratios of the bank
remained stable at 1.0% and 0.5%, respectively, with a provision coverage ratio of
84.1% including write-offs (84.3% in 4QFY2011). The bank has already switched
over all its accounts to system-driven NPA recognition system (reflected in the
`830cr slippages in 1QFY2011), one of the few PSU banks to have completed this
exercise well before the mandated timeline. We estimate the slippage ratio to be
1.6% each for FY2012 and FY2013.
83.3
83.0
1.0
0.5
1.0
0.5
1.0
0.6
1.3
0.7
1.5
0.8
0.5
August 9, 2011
1QFY12
4QFY11
3QFY11
2QFY11
1QFY11
84.5
6.0
84.0
5.0
83.5
4.0
83.0
3.0
82.5
2.0
82.0
1.0
1.3
Slippages (%)
Credit cost (%, RHS)

1.4
1.2
1.0
0.8
0.8
0.6
0.4
1QFY11
2QFY11
0.2
0.1
3QFY11
4QFY11
0.9
83.0
84.1
1.9
1.0
NPA coverage (%, RHS)

84.3
1.6
Net NPAs (%)
1.5
2.1
Gross NPAs (%)
Exhibit 9: Lower slippages for 1QFY2012
5.3
Exhibit 8: Stable asset quality
0.4
0.2
-
1QFY12
Operating expenses increase qoq

For 1QFY2012, the banks operating expenses increased by 3.9% qoq to `498cr,
driven by a 16.0% sequential rise in employee expenses to `359cr. The banks
cost-to-income ratio deteriorated to 38.9% in 1QFY2012 from 34.7% in
4QFY2011.
Exhibit 10: Higher employee expenses for 1QFY2012
30.0
1.7
40.0
1.7
1.6
1.6
2.0
10.0
20.0
1.0
10.0
0.5
38.9
1.5
34.7
30.0
36.9
1QFY12
2.5
1.9
41.7
359
309
4QFY11
3QFY11
2QFY11
1QFY11
Opex to average assets (%, RHS)
50.0
40.0
34.7
38.9
139
170
159
34.7
333
150
36.9
Cost-to-income ratio (%)
CIR (%, RHS)
20.0
369
300
123
450
34.7
321
600
Other opex (` cr)
41.7
142
Staff exps (` cr)
Exhibit 11: Stable opex-to-avg. assets for 1QFY2012

Investment arguments
Relatively high yield on advances, with resilient asset quality
A large part of the banks credit book comprises SME and mid-size corporates,
contributing relatively high yield on advances but, at the same time, maintaining
superior asset quality with net NPA ratio of less than 1%.
Moderate CASA franchise

Indian Bank opened 107 branches in FY2011, taking its total branch network to
1,895 with 100% CBS. The bank has moderate CASA of 31.0%, with CASA
reporting an 18.3% CAGR during FY200711 and growing by 15.0% yoy in
1QFY2012.
Outlook and valuation

Indian Banks performance and strategic direction have broadly been positive and
balanced since its listing, leading to a gradual improvement in the quality of
earnings vis--vis its peers. Additionally, the banks CMD has a five-year tenure,
which provides a reasonable strategic stability to the bank. Moreover, the banks
predominantly rural and semi-urban presence has enabled it to maintain
reasonable cost of funds, resulting in more resilient NIMs than other mid-size PSU
banks. At the CMP, the stock is trading at 5.4x FY2013E EPS of `39.8 and 0.9x
FY2013E ABV of `244.3, which is below our target multiple of 1.0x FY2013 ABV.
Hence, we recommend an Accumulate rating on the stock with a target price of
`232, implying a 9.0% upside from current levels.
August 9, 2011
Exhibit 12: Key assumptions

Earlier estimates
Particulars (%)
Revised estimates
FY2012E
FY2013E
FY2012E
FY2013E
Credit growth
19.0
17.0
19.0
17.0
Deposit growth
15.0
14.0
15.0
14.0
CASA ratio
30.5
30.4
30.5
30.4
NIM
3.5
3.3
3.3
3.0
Other income growth
5.2
12.5
(3.9)
14.9
Growth in staff expenses
2.5
12.0
9.0
12.0
Growth in other expenses
15.0
15.0
10.0
15.0
1.7
1.7
1.6
1.6
81.0
81.0
81.0
80.0
0.2
0.1
0.2
0.1
Slippages
Coverage ratio
Treasury gain/(loss) (% of investments)
Exhibit 13: Change in estimates

Particulars
(` cr)
Earlier
estimates
4,435
NII
FY2012
Revised
% chg
estimates
4,166 (6.1)
FY2013
Earlier
estimates
4,798
Revised
% chg
estimates
4,434 (7.6)
Non-interest income
1,243
1,136
(8.6)
1,398
1,305
(6.7)
Operating income
5,678
5,302
(6.6)
6,196
5,739
(7.4)
Operating expenses
2,049
2,106
2.8
2,315
2,378
2.7
Pre-prov. profit
3,630
3,196 (11.9)
3,881
3,361 (13.4)
Provisions & cont.
819
PBT
791
2,810
Prov. for taxes
(3.5)
813
2,405 (14.4)
3,068
774
(4.8)
2,587 (15.7)
912
780 (14.4)
995
839 (15.7)
PAT
1,898
1,625 (14.4)
2,073
1,748 (15.7)
Preference Dividend
4,435
4,166
(6.1)
4,798
4,434
(7.6)
PAT avl. To equity sh.
1,243
1,136
(8.6)
1,398
1,305
(6.7)
Exhibit 14: P/ABV bands

Price(`)
0.5x
0.8x
1.1x
1.4x
1.7x
500
450
400
350
300
250
200
150
100
50
Mar-12
Dec-11
Sep-11
Jun-11
Dec-10
Mar-11
Sep-10
Jun-10
Dec-09
Mar-10
Sep-09
Jun-09
Mar-09
Dec-08
Sep-08
Jun-08
Mar-08
Dec-07
Sep-07
Jun-07
Mar-07
August 9, 2011
Exhibit 15: Recommendation summary

CMP
(`)
Tgt.
price (`)
Upside
(%)
FY2013E
P/ABV (x)
FY2013E
Tgt. P/ABV (x)
FY2013E
P/E (x)
FY11-13E
CAGR in EPS (%)
FY2013E
RoA (%)
FY2013E
RoE (%)
1,211
1,648
36.1
1.9
2.7
10.0
20.9
1.5
21.0
384
441
14.9
1.0
1.2
7.9
19.0
1.2
13.9
Accumulate
466
519
11.4
3.1
3.5
16.2
30.5
1.7
20.9
ICICIBk*
Buy
941
1,281
36.1
1.7
2.3
13.3
25.8
1.5
16.0
SIB
Buy
21
24
16.1
1.1
1.3
6.5
11.6
0.9
17.2
YesBk
Buy
292
353
20.7
1.9
2.3
9.8
19.1
1.2
20.6
AllBk
Neutral
191
0.9
5.4
9.2
0.9
17.8
AndhBk
Neutral
132
0.9
5.9
(0.6)
0.9
15.9
BOB
Buy
854
1,018
19.2
1.2
1.4
6.4
10.8
1.1
19.6
BOI
Accumulate
350
397
13.4
1.0
1.1
5.5
18.7
0.8
18.0
BOM
Buy
52
61
18.3
0.7
0.8
4.9
30.8
0.6
14.8
CanBk
Accumulate
434
490
13.1
0.8
1.0
5.0
(2.4)
0.9
17.2
CentBk
Neutral
109
0.8
5.3
(14.0)
0.5
14.4
CorpBk
Buy
460
576
25.3
0.7
0.9
4.3
6.1
0.9
17.9
DenaBk
Neutral
83
0.6
3.9
7.0
0.8
16.5
IDBI#
Neutral
118
0.7
5.5
13.0
0.7
14.3
IndBk
Accumulate
213
232
9.0
0.9
1.0
5.4
1.2
1.2
17.8
IOB
Accumulate
128
143
11.3
0.8
0.9
4.9
22.4
0.7
16.4
J&KBk
Neutral
841
0.9
5.8
7.3
1.2
16.5
OBC
Accumulate
333
372
11.5
0.8
0.9
5.6
7.5
0.9
14.4
PNB
Accumulate
1,116
1,217
9.1
1.3
1.4
6.9
7.4
1.0
20.0
SBI*
Buy
2,231
2,776
24.5
1.7
2.1
8.2
44.2
1.1
22.6
SynBk
Buy
111
131
18.5
0.8
0.9
5.1
8.6
0.6
15.6
UcoBk
Neutral
UnionBk
Accumulate
UtdBk
VijBk
Company
Reco.
AxisBk
Buy
FedBk
Accumulate
HDFCBk
77
1.0
4.6
16.0
0.6
17.0
279
313
12.3
1.0
1.2
5.9
20.0
0.8
17.9
Buy
87
103
18.3
0.7
0.9
5.1
13.2
0.6
14.1
Neutral
60
0.8
6.4
61.9
0.4
11.7
Source: Company, Angel Research; Note: *Target multiples=SOTP Target Price/ABV (including subsidiaries), # Without adjusting for SASF
August 9, 2011
Income statement
Y/E March (` cr)
NII
FY07
FY08
FY09
FY10
FY11
FY12E
FY13E
1,872
1,992
2,609
3,161
4,036
4,166
4,434
- YoY Growth (%)
24.0
6.4
31.0
21.2
27.7
3.2
6.4
Other Income
823
1,068
1,035
1,316
1,182
1,136
1,305
- YoY Growth (%)

Operating Income
- YoY Growth (%)
Operating Expenses
- YoY Growth (%)
Pre-Provision Profit
54.9
29.7
(3.0)
27.1
(10.2)
(3.9)
14.9
2,695
3,060
3,644
4,478
5,218
5,302
5,739
32.0
13.5
19.1
22.9
16.5
1.6
8.3
1,247
1,400
1,415
1,730
1,926
2,106
2,378
15.5
12.3
1.1
22.3
11.3
9.3
12.9
1,448
1,659
2,229
2,747
3,292
3,196
3,361
- YoY Growth (%)
50.6
14.6
34.3
23.3
19.8
(2.9)
5.2
Prov. & Cont.
564
424
443
396
657
791
774
- YoY Growth (%)
40.6
(24.8)
4.3
(10.6)
66.1
20.3
(2.1)
Profit Before Tax
884
1,235
1,786
2,352
2,634
2,405
2,587
- YoY Growth (%)
57.7
39.7
44.6
31.7
12.0
(8.7)
7.6
Prov. for Taxation
124
226
541
797
920
780
839
- as a % of PBT
14.1
18.3
30.3
33.9
34.9
32.4
32.4
PAT
760
1,009
1,245
1,555
1,714
1,625
1,748
- YoY Growth (%)
50.6
32.8
23.5
24.9
10.2
(5.2)
7.6
Preference Dividend
36
40
43
46
46
37
37
PAT avl. To equity sh.
723
969
1,203
1,509
1,668
1,588
1,710
- YoY Growth (%)
43.4
33.9
24.1
25.5
10.5
(4.8)
7.7
Balance sheet
Y/E March (` cr)
Share Capital
Equity
Preference
Reserves & Surplus
Deposits
- Growth (%)
Borrowings
Tier 2 Capital
Other Liab. & Prov.
FY08
FY09
FY10
FY11
FY12E
FY13E
830
830
830
830
830
830
830
430
430
430
430
430
430
430
400
400
400
400
400
400
400
3,011
4,381
6,306
7,442
8,691
9,929
11,265
47,091
61,046 72,582
88,228 105,804 121,675 138,709
15.4
29.6
18.9
21.6
19.9
15.0
14.0
1,936
1,283
531
657
800
920
1,049
216
300
300
1,300
1,547
1,810
3,281
2,752
3,573
3,932
4,293
5,075
5,909
Total Liabilities
56,149
Cash Balances
3,729
6,433
6,212
7,061
6,878
7,909
9,016
Bank Balances
1,088
340
472
1,052
1,684
2,800
3,191
70,508 84,122 101,389 121,718 139,976 159,573
38,626
Investments
20,878
21,915 22,801
28,268
34,784
36,185
Advances
29,058
39,839 51,465
89,547 104,770
62,146
75,250
37.1
29.2
20.8
21.1
19.0
17.0
551
539
1,594
1,580
1,606
1,792
1,981
844
1,442
1,578
1,282
1,516
1,744
1,988
- Growth (%)
29.2
Fixed Assets
Other Assets
Total Assets
- Growth (%)
August 9, 2011
FY07
56,149
17.9
70,508 84,122 101,389 121,718 139,976 159,573

25.6
19.3
20.5
20.1
15.0
14.0
Ratio analysis
Y/E March
FY07
FY08
FY09
FY10
FY11 FY12E
FY13E
3.7
3.2
3.5
3.5
3.7
3.3
3.0
46.3
45.8
38.8
38.6
36.9
39.7
41.4
Profitability ratios (%)

NIMs
Cost to Income ratio
ROA
1.5
1.6
1.6
1.7
1.5
1.2
1.2
ROE
27.7
25.8
24.7
25.6
23.5
19.0
17.8
CASA ratio
35.4
32.3
31.6
32.2
30.9
30.5
30.4
Credit/Deposit ratio
61.7
65.3
70.9
70.4
71.1
73.6
75.5
CAR
14.1
12.9
12.0
11.5
12.3
13.6
13.6
- Tier I
12.3
11.4
10.2
10.1
10.0
11.1
11.1
Gross NPAs
1.9
1.2
0.9
0.8
1.0
1.9
2.6
Net NPAs
0.4
0.2
0.2
0.2
0.5
0.7
0.8
Slippages
0.7
1.5
0.6
1.1
1.5
1.6
1.6
Loan loss prov. /avg. assets
0.2
0.6
0.0
0.4
0.6
0.4
0.4
81.3
79.9
79.6
93.6
84.3
81.0
80.0
EPS
16.8
22.5
28.0
35.1
38.8
36.9
39.8
ABVPS ( 75% Coverage for NPAs)
75.0 106.9 127.5 154.3 179.5
B/S ratios (%)
Asset Quality (%)
Provision coverage
Per Share Data (`)
213.2
244.3
3.0
3.0
5.0
6.5
7.5
7.0
7.5
12.7
9.4
7.6
6.1
5.5
5.8
5.4
P/ABVPS (x)
2.8
2.0
1.7
1.4
1.2
1.0
0.9
Dividend Yield
1.4
1.4
2.3
3.1
3.5
3.3
3.5
NII
3.6
3.1
3.4
3.4
3.6
3.2
3.0
(-) Prov. Exp.
1.1
0.7
0.6
0.4
0.6
0.6
0.5
Adj NII
2.5
2.5
2.8
3.0
3.0
2.6
2.4
Treasury
0.1
0.4
0.3
0.4
0.1
0.0
0.0
Int. Sens. Inc.
2.6
2.9
3.1
3.4
3.2
2.6
2.5
Other Inc.
1.5
1.3
1.1
1.0
0.9
0.8
0.8
Op. Inc.
4.1
4.2
4.1
4.4
4.1
3.4
3.3
Opex
2.4
2.2
1.8
1.9
1.7
1.6
1.6
PBT
1.7
2.0
2.3
2.5
2.4
1.8
1.7
Taxes
0.2
0.4
0.7
0.9
0.8
0.6
0.6
DPS
Valuation Ratios
PER (x)
Dupont Analysis
ROA
August 9, 2011
1.5
1.6
1.6
1.7
1.5
1.2
1.2
Leverage
18.9
16.2
15.3
15.3
15.3
15.3
15.2
ROE
27.7
25.8
24.7
25.6
23.5
19.0
17.8
Research Team Tel: 022 - 39357800
E-mail: research@angelbroking.com
Website: www.angelbroking.com
DISCLAIMER
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Disclosure of Interest Statement

1. Analyst ownership of the stock
2. Angel and its Group companies ownership of the stock
3. Angel and its Group companies' Directors ownership of the stock
4. Broking relationship with company covered
Indian Bank
No
No
No
No
Note: We have not considered any Exposure below ` 1 lakh for Angel, its Group companies and Directors
Ratings (Returns):
August 9, 2011
Buy (> 15%)

Reduce (-5% to 15%)
Accumulate (5% to 15%)

Sell (< -15%)
Neutral (-5 to 5%)
10

Indian Bank: Performance Highlights

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1QFY2012 Result Update | Banking

Market Cap (` cr)

Source: Company, Angel Research

52 Week High / Low

Avg. Daily Volume

Face Value (`)

Shareholding Pattern (%)

MF / Banks / Indian Fls

FII / NRIs / OCBs

Indian Public / Others

Source: Company, Angel Research

Please refer to important disclosures at the end of this report

Indian Bank | 1QFY2012 Result Update

Exhibit 1: 1QFY2012 performance

% chg (qoq) 1QFY11

Provisions & cont.

Prov. for taxes

Cost-to-income ratio (%)

Effective tax rate (%)

Net NPA (%)

Exhibit 2: 1QFY2012 actual vs. Angel estimates

Provisions & cont.

Prov. for taxes

Source: Company, Angel Research

Indian Bank | 1QFY2012 Result Update

Growth momentum continues; though NIM declines 43bp qoq

Exhibit 3: Corporate and overseas credit driving advances growth

% chg (qoq) 1QFY11

Source: Company, Angel Research

1QFY11 2QFY11 3QFY11 4QFY11 1QFY12

CASA yoy growth (%, RHS)

CDR (%, RHS)

Dep. qoq chg (%)

Adv. qoq chg (%)

Exhibit 5: CASA ratio stable at 31%

Exhibit 4: Strong business growth during 1QFY2012

1QFY11 2QFY11 3QFY11 4QFY11 1QFY12

Indian Bank | 1QFY2012 Result Update

Exhibit 7: 32 branches opened during the quarter

Source: Company, Angel Research

Exhibit 6: Sharp drop in reported NIM for 1QFY2012

1QFY11 2QFY11 3QFY11 4QFY11 1QFY12

Non-interest income weak for 1QFY2012

Asset quality remains stable

Source: Company, Angel Research

Credit cost (%, RHS)

NPA coverage (%, RHS)

Net NPAs (%)

Gross NPAs (%)

Exhibit 9: Lower slippages for 1QFY2012

Exhibit 8: Stable asset quality

Source: Company, Angel Research

Indian Bank | 1QFY2012 Result Update

Operating expenses increase qoq

Exhibit 10: Higher employee expenses for 1QFY2012

Source: Company, Angel Research

Opex to average assets (%, RHS)

Cost-to-income ratio (%)

CIR (%, RHS)

Other opex (` cr)

Staff exps (` cr)

Exhibit 11: Stable opex-to-avg. assets for 1QFY2012