Indian Bank (INDIANB) Q1 24/25 earnings summary

Executive summary

• Net profit for Q1 FY25 rose 41% year-over-year to ₹2,403 crore, with operating profit up 9% and net interest income up 8%.

• Advances grew 12% YoY to ₹5.39 lakh crore, deposits increased 10% YoY to ₹6.81 lakh crore; CASA ratio at 39.03%-41%.

• Asset quality improved: Gross NPA at 3.77% (down 170 bps YoY), Net NPA at 0.39%, PCR at 96.66%.

• Digital transactions now account for 90% of total, with mobile and UPI users up 33% and 30% YoY.

• Board approved unaudited standalone and consolidated results for the quarter ended June 30, 2024.

Financial highlights

• Interest income grew 15% YoY to ₹15,039 crore; non-interest income up 11% YoY to ₹1,906 crore.

• Fee income grew 17%; bad debt recovery at INR 504 crore, up 180% YoY.

• Operating expenses rose 9% YoY to ₹3,582 crore; cost-to-income ratio at 44%.

• Net interest margin (NIM) domestic at 3.53%; cost of deposits at 5.05%.

• Earnings per share increased to ₹71.37; book value per share at ₹369.91.

Outlook and guidance

• Deposit growth guidance of 8-10% achieved; advances growth at 12% within 11-13% guidance.

• Recovery target for FY25 is INR 7,000 crore; INR 1,937 crore achieved in Q1.

• Margins expected to remain above 3.4%, with cost of deposits likely to rise slightly.

• ROA expected to continue improving from current 1.20%; credit cost to remain below 0.71%.

• Management highlights robust growth in retail, agriculture, and MSME segments, with continued focus on digital transformation and asset quality.