This Government Banking Stock Could Jump 38%, Feels Top Brokerage House

Analysts at Emkay Global met Indian Bank's MD & CEO to discuss the bank's near-to-medium term business strategy amid the increasing global & macro uncertainty. Following the assessment and analysis Emkay Global feels that the stock of Indian Bank could be a good stock to buy.

Buy Indian Bank stock with a price target of Rs 375

Based on the current market price of Rs 270 and looking at the target price of Rs 375 set on the stock, the potential upside is a massive 38%.

According to Emkay Global, the Bank maintains clarity on achieving growth without compromising on margins; thus, it would avoid chasing growth in its corporate book. "Consequently, bank guides for 13-14% credit growth in FY23 (lower than the system at 15-16%) and foresees maintaining a similar trend in FY24, based on macro conditions and focus on margins," the brokerage has said.

Plans to build new CASA and retail deposit pockets

According to Emkay Global, Indian Bank benefited the most from its merger with east-India based Allahabad Bank, in terms of CASA, which stands high at 40% amongst peers. However, CASA is under pressure for most banks due to cannibalization towards TDs as well as competition from NSS (National Saving Schemes) and other alternative investments.

"Bank has been rationalizing its branch network since long post-merger, and would now look to expand the network to new SA/retail deposit pockets, for mobilizing deposits. Bank will also focus on NRI/HNI deposit pockets, with targeted deposit products.

Management understands that such measures will bear fruit in the medium-to-long term and, thus, its immediate focus will be on sweating the existing branch network and client relationships, while managing credit growth in sync with deposit growth to maintain ALM," the brokerage has said.

Disclaimer

The stocks have been picked from the brokerage report of Emkay Global. Greynium Information Technologies, the Author, and the respective Brokerage House are not liable for any losses caused as a result of decisions based on the article. Goodreturns.in advises users to check with certified experts before taking any investment decision.