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Indian Bank Q4FY26 results highlights
On the asset quality front, the bank’s gross non-performing assets (NPA) eased to 1.98 per cent from 2.23 per cent in the December 2025 quarter (Q3FY26). Net NPA remained flat at 0.15 per cent on a quarter-on-quarter (Q-o-Q) basis.
Provisions witnessed a sharp jump of 54.7 per cent to ₹1,228 crore in Q4FY26 from ₹794 crore in the corresponding quarter of the previous fiscal.
The bank’s deposits increased by 12.29 per cent Y-o-Y to ₹8.27 trillion in March 2026, compared to ₹7.37 trillion in the year-ago period. Gross advances rose 13.43 per cent Y-o-Y to ₹6.67 trillion from ₹5.88 trillion.
The bank’s board has recommended a dividend of ₹18.25 per equity share for the financial year 2025-26.
Brokerages on Indian Bank results & outlook
According to Motilal Oswal Financial Services (MOFSL), Indian Bank delivered an in-line quarter, with net interest margins (NIMs) broadly matching estimates despite a marginal quarter-on-quarter decline.
The bank has guided for NIMs in the 3.1-3.25 per cent range, factoring in continued pressure from the elevated cost of funds. Loan growth remained steady and broadly in line with industry trends, although management indicated it may trail system growth by around 1-2 per cent to maintain pricing discipline.
“The bank also made additional provisions of ₹3.1 billion relating to the West Asia crisis. On asset quality, slippages were slightly higher due to MOC-related adjustments; however, overall asset quality ratios improved. The bank continues to maintain a best-in-class PCR, providing comfort on incremental credit costs,” the brokerage said in its note.
MOFSL also noted that the transition to expected credit loss (ECL) provisioning is likely to have a manageable impact and can be absorbed over the next one to three quarters.
The brokerage has slightly revised its earnings estimates and expects the bank to deliver return on assets (RoA) and return on equity (RoE) of 1.3 per cent and 17.6 per cent, respectively, in FY27E. It maintained a ‘Buy’ rating with an unchanged target price of ₹1,025, based on 1.5x September 2027 estimated book value.
According to Systematix Institutional Equities, Indian Bank’s Q4FY26 PAT was 3.8 per cent below estimates of ₹32.3 billion, but still grew 1.4 per cent Q-o-Q and 5 per cent Y-o-Y. The sequential improvement was driven by higher net interest income (NII), strong fee income growth, and lower operating expenses, led by reduced employee and other costs. The bank management expects the cost of funds to grow going ahead, while retail term deposits are unlikely to reprice further, which may keep margins under pressure. NIMs are expected to remain in the 3.10–3.25 per cent range.
The brokerage said asset quality witnessed some pressure, with the annualised gross slippage ratio rising to 0.85 per cent, up 21 bps Q-o-Q. Management attributed higher slippages of ₹4 billion to marking-of-changes (MOC), which it described as a year-end phenomenon. Credit costs rose to 0.77 per cent, up 21 bps Q-o-Q, though the bank made a prudent provision of ₹3.1 billion related to the West Asia conflict, with no additional stress observed.
Management has guided the slippage ratio and credit costs to remain below 1 per cent going forward. Liquidity coverage ratio (LCR) stood at 127 per cent, with a potential 4-5 bps benefit expected from new LCR norms.
Systematix maintained a ‘Hold’ rating on Indian Bank with an unchanged target price of ₹990, valuing the standalone bank at 1.5x FY28E adjusted book value per share of ₹659.
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Disclaimer: View and outlook shared belong to the respective brokerages/analysts and are not endorsed by Business Standard. Readers’ discretion is advised.
