Prabhudas Lilladher has issued a buy rating on Indian Bank with a target price of ₹1000 in its research report dated July 14, 2026. According to the brokerage's analysis, the bank demonstrated decent quarterly performance with healthy loan growth and net interest margin (NIM), resulting in higher net interest income and NIM. However, core profit after tax (PAT) faced pressure due to elevated expected credit loss (ECL) provisions during the quarter. The latest development sees Geojit Financial Services also recommending a buy rating with a slightly higher target price of ₹1010 in its July 15, 2026 report.
Indian Bank delivered robust financial results with gross advances growing 13.9% YoY and deposits growing 13.5% YoY, maintaining a healthy CD ratio of 81.06%. The bank's CASA grew 15.3% YoY with domestic CASA ratio improving to 39.73% from 38.97% YoY. RAM advances rose 14.8% YoY across retail (+18.7%), agriculture (+10.0%), and MSME (+17.0%), lifting RAM's share of domestic advances to 66%. Net Interest Income (NII) grew 16.9% YoY to ₹7,435 crore with domestic NIM expanding 6 bps YoY/QoQ to 3.41%. The cost-to-income ratio improved to 44.8% from 45.8% YoY, while operating profit rose 16.5% YoY to ₹5,557 crore.
The bank made ₹10 billion in ECL provisions during the quarter, with management indicating that one-time ECL impact could reach ₹30 billion. As reported by Prabhudas Lilladher, incremental provision is likely to be 12 basis points on standard assets. Despite this provisioning burden, the bank continues to prioritize profitability over aggressive growth, with management focusing on sustainable earnings consistency. Geojit Financial Services notes that the key monitorable is the ECL transition, with planned FCNR/ECB fundraising expected to aid liquidity and margins.
Prabhudas Lilladher projects loan and deposit compound annual growth rates (CAGR) of 12.5% and 11.0% respectively over FY26-28E. According to the brokerage's analysis, Indian Bank is positioned as a quality public sector bank (PSB) due to its management quality and consistent earnings performance. The bank's focus on profitability metrics supports its long-term growth strategy. Geojit Financial Services expects the bank to maintain its FY27 guidance, tracking the upper quartile across advances, deposits, CASA, GNPA, NIM, RoA, cost-to-income, and credit costs.
The bank's strong quarterly performance with reported PAT growing 10.1% YoY to ₹3,273 crore and continued focus on asset quality and return ratios has reinforced investor confidence. Both brokerages maintain bullish outlooks, with Prabhudas Lilladher expecting core PAT CAGR of approximately 20% over FY26-28E and Geojit Financial Services targeting ₹1010 based on 1.4x FY27E book value per share. The bank's mid-sized status with a loan book of ₹6.85 lakh crore and deposit base of ₹8.44 lakh crore through 6,003 domestic branches positions it well for sustained growth.
