Public sector bank shares rallied strongly on Friday, July 10, with the Nifty PSU Bank index jumping over 4% as investors positioned themselves ahead of strong quarterly results. According to reports from CNBC TV18 and Upstox Securities, Indian Bank led the gains, surging as much as 10%, while other major PSU banks including State Bank of India, Canara Bank, Bank of Baroda, Bank of Maharashtra, Punjab National Bank (PNB), and Bank of India advanced between 2% and 9%. The rally was primarily driven by expectations of robust Q1 performance across the sector.
The rally was primarily driven by Indian Bank's healthy quarterly earnings for the June quarter. As reported by CNBC TV18, the lender posted a 10% year-on-year increase in net profit to ₹3,273 crore, while net interest income (NII) grew 17% to ₹7,435 crore. The bank's asset quality continued to strengthen during the quarter, with the gross non-performing asset (GNPA) ratio improving to 1.86% from 1.98% in the March quarter, while the net NPA ratio remained stable at 0.15%. The strong performance has set a positive tone for the broader public sector banking segment, with investors responding positively to the improved financial metrics and operational efficiency gains.
According to the earnings report, Indian Bank reported significant improvements in profitability metrics. The bank's domestic net interest margin (NIM) expanded to 3.41%, compared with 3.35% in both the preceding quarter and the year-ago period. Meanwhile, provisions declined marginally on a sequential basis to ₹1,196 crore from ₹1,226 crore, while the slippage ratio improved to 0.77% from 0.94% a year ago. The credit-deposit (CD) ratio rose to 81.06% from 80.77% in the corresponding period last year, indicating stronger business growth and improved asset utilization.
Latest market data shows continued strength in PSU banking stocks, with the Nifty PSU Bank index advancing 1.35% to 8,420.10 as of 10:25 IST. Bank of Maharashtra emerged as the top gainer with a 2.5% increase, followed by Central Bank of India (2.02%), Bank of India (1.91%), State Bank of India (1.81%), and Indian Bank (1.61%). Other notable gainers included Union Bank of India (1.35%), Canara Bank (1.23%), and UCO Bank (1.18%). The broader market showed positive momentum with the BSE 150 MidCap Index jumping 0.72% and the BSE 250 SmallCap Index climbing 1.08%, indicating strong market breadth with 2,510 shares rising against 1,089 declining on the BSE.
