2QFY2013 Result Update | Banking

October 26, 2012

Indian Bank
Performance Highlights

NEUTRAL
CMP Target Price
2QFY13 1,153 840 462 % chg (qoq) (2.8) 8.0 7.3 2QFY12 1,135 921 469 % chg (yoy) (1.3) (1.5) 5.7

`178 -

Particulars (` cr) NII Pre-prov. profit PAT

2QFY13 1,120 907 496

Investment Period
Stock Info Sector Market Cap (` cr) Beta 52 Week High / Low Avg. Daily Volume Face Value (`) BSE Sensex Nifty Reuters Code Bloomberg Code Banking 7,669 1.1 265/152 22,179 10 18,625 5,664 INBA.BO INBK@IN

Source: Company, Angel Research

During 2QFY2013, Indian Bank reported a poor operating performance, with flattish operating income and a 1.5% yoy decline in the operating profit. However, 8.2% yoy decline in provisioning expenses (on a base of higher investment provisioning in 2QFY2012 and write-back of contingent provision) as well as large `101cr interest on IT refund, aided the bank to report an earnings growth of 5.7% yoy. NIMs decline sequentially; Slippages higher due to one chunky account: The advances for the bank grew at a moderate pace of 10.8% yoy during 2QFY2013, mainly aided by a strong growth in the agri segments and the overseas book. Despite a 13.5% yoy growth in savings deposits, the growth in the low-cost CASA franchise remained moderate at 9.8% yoy, due to a 5.4% yoy decline in current deposits. The CASA ratio for the bank dipped 35bp sequentially to 29.0%. The reported NIM for the bank declined sequentially by 18bp to 3.3% largely due to a 16bp fall in the yield on advances on interest reversal of `26cr on slipped accounts and full impact of base rate reduction in May 2012. The growth in noninterest income (excluding treasury) for the bank remained muted at 3.7% yoy to `333cr, despite being aided by interest on IT refund amounting to `101cr. On the asset quality front, slippages came in at `734cr (which included one chunky account of `360cr - currently referred to CDR) compared to `232cr in 1QFY2013 and quarterly average of `425cr since 1QFY2011. Annualized slippage ratio came in at 3.3%, much higher than 1.0% witnessed in 1QFY2013 and average run rate of 2.4% since 1QFY2011. On an absolute basis, both gross and net NPA levels increased by 27.4% and 30.8%, respectively. PCR for the bank dipped sequentially by 411bp to 71%. Additionally, the bank restructured ~`675cr worth of advances, thereby taking its outstanding restructured book to `10,349cr as of 2QFY2013. As per the management, no major restructuring is in the pipeline, except for the aforementioned exposure of ~`360cr under CDR. Outlook and valuation: The stock currently trades at 0.7x FY2014E ABV, below its eight-year trading range (0.8x-1.3x) and median of 1.0x. However, in our view, upsides are likely to be lower than peers as we remain circumspect on the banks high RoAs and remain cautious on its asset quality. Hence, we recommend a Neutral rating on the stock.

Shareholding Pattern (%) Promoters MF / Banks / Indian Fls FII / NRIs / OCBs Indian Public / Others 80.0 5.4 8.7 5.9

Abs. (%) Sensex Indian Bank

3m 11.9 (3.1)

1yr 7.7 (12.1)

3yr 11.3 8.2

Key financials (Standalone)

Y/E March (` cr) NII % chg Net profit % chg NIM (%) EPS (`) P/E (x) P/ABV (x) RoA (%) RoE (%)
Source: Company, Angel Research

FY2011 4,036 27.7 1,714 10.2 3.7 38.8 4.6 1.0 1.5 23.5

FY2012 4,418 9.5 1,747 1.9 3.5 39.6 4.5 0.8 1.3 20.4

FY2013E 4,726 7.0 1,792 2.6 3.2 40.6 4.4 0.7 1.2 18.1

FY2014E 5,407 14.4 1,844 2.9 3.2 41.8 4.3 0.6 1.1 16.3

Vaibhav Agrawal
022 3935 7800 Ext: 6808 vaibhav.agrawal@angelbroking.com

Varun Varma
022 3935 7800 Ext: 6847 varun.varma@angelbroking.com

Sourabh Taparia
022 3935 7800 Ext: 6872 sourabh.taparia@angelbroking.com

Please refer to important disclosures at the end of this report

Indian Bank | 2QFY2013 Result Update

Exhibit 1: 2QFY2013 performance (Standalone)

Particulars (` cr) Interest earned - on Advances / Bills - on investments - on balance with RBI & others Interest Expended Net Interest Income Other income Other income excl. treasury - Fee Income - Treasury Income - Recoveries from write-off acc Operating income Operating expenses - Employee expenses - Other opex Pre-provision Profit Provisions & Contingencies - Provisions for NPAs - Provisions for Investments - Other provisions PBT Provision for Tax PAT 2QFY13 3,410 2,612 788 10 2,290 1,120 363 333 280 30 53 1,484 576 379 197 907 202 251 9 (58) 705 210 496 29.7 1QFY13 % chg (qoq) 3,374 2,610 758 6 2,221 1,153 223 200 169 22 32 1,376 536 369 166 840 146 98 2 46 695 233 462 33.5 1.1 0.1 4.0 64.1 3.1 (2.8) 63.2 66.2 65.3 36.0 65.5 7.8 7.6 2.7 18.4 8.0 38.8 156.8 295.3 1.5 (10.0) 7.3 (379)bp 2QFY12 % chg (yoy) 3,035 2,356 675 3 1,899 1,135 342 321 281 21 40 1,478 557 367 190 921 220 102 96 22 701 232 469 33.1 12.4 10.9 16.7 196.0 20.6 (1.3) 6.2 3.7 (0.5) 44.4 33.1 0.4 3.5 3.4 3.7 (1.5) (8.2) 146.2 (90.4) 0.6 (9.6) 5.7 (337)bp 1HFY13 6,784 5,222 1,546 16 4,511 2,273 586 533 449 53 85 2,860 1,112 748 364 1,747 348 349 12 (13) 1,400 442 958 31.6 1HFY12 % chg (yoy) 5,816 4,516 1,292 8 3,651 2,165 592 524 465 68 59 2,757 1,055 725 330 1,702 397 170 165 62 1,305 429 876 32.9 16.6 15.6 19.6 110.1 23.6 5.0 (0.9) 1.9 (3.3) (22.6) 44.7 3.7 5.4 3.2 10.3 2.7 (12.4) 105.2 (93.0) 7.3 3.1 9.3 (128)bp

Effective Tax Rate (%)

Source: Company, Angel Research

Exhibit 2: 2QFY2013 Actual vs Angel estimates

Particulars (` cr) NII Non-interest income Operating income Operating expenses Pre-prov. profit Provisions & cont. PBT Prov. for taxes PAT Source: Company, Angel Research Actual 1,120 363 1,484 576 907 202 705 210 496 Estimates 1,200 258 1,457 551 906 203 703 228 475 Var. (%) (6.6) 41.1 1.8 4.6 0.1 (0.4) 0.3 (8.1) 4.4

October 26, 2012

Indian Bank | 2QFY2013 Result Update

Exhibit 3: 2QFY2013 performance (Standalone)

Particulars Balance sheet Advances (` cr) Deposits (` cr) Credit-to-Deposit Ratio (%) Current deposits (` cr) Saving deposits (` cr) CASA deposits (` cr) CASA ratio (%) CAR (%) Tier 1 CAR (%) Profitability Ratios (%) Cost of deposits Yield on advances Reported NIM Cost-to-income ratio Asset quality Gross NPAs (` cr) Gross NPAs (%) Net NPAs (` cr) Net NPAs (%) Provision Coverage Ratio (%) Slippage ratio (%) NPA to avg. assets (%)
Source: Company, Angel Research

2QFY13 1QFY13 % chg (qoq) 2QFY12 % chg (yoy) 95,000 72.4 6,448 31,546 37,994 29.0 13.0 10.7 7.1 11.1 3.1 38.9 1,980 2.1 1,260 1.3 71.0 3.3 0.7 93,876 73.9 6,292 30,936 37,228 29.3 13.0 10.7 7.0 11.3 3.3 38.9 1,554 1.7 963 1.0 75.1 1.0 0.3 1.2 (149)bp 2.5 2.0 2.1 (35)bp (2)bp (1)bp 7bp (16)bp (18)bp (8)bp 27.4 40bp 30.8 29bp (411)bp 222bp 40bp 85,765 73.8 6,813 27,804 34,617 29.8 12.2 9.9 6.6 12.1 3.8 37.7 1,048 1.2 596 0.7 79.4 2.0 0.3 10.8 12.9 (138)bp (5.4) 13.5 9.8 (82)bp 73bp 82bp 48bp (94)bp (64)bp 117bp 89.0 85bp 111.4 64bp (838)bp 123bp 36bp

131,180 127,012

3.3 116,218

Business growth moderates; NIMs decline sequentially

During 2QFY2013, the banks advances grew at a moderate pace of 10.8% yoy. Within advances, the overseas book grew by 20.9% (partly due to INR depreciation), while growth in the agriculture book was strong at 18.2% yoy. On the liability front, growth in deposits was relatively higher at 12.9% yoy.
Despite a 13.5% yoy growth witnessed in savings deposits, growth in the low-cost CASA franchise remained moderate at 9.8% yoy, due to a 5.4% yoy decline witnessed in current deposits. Consequently, the CASA ratio for the bank dipped by 82bp yoy (35bp sequentially) to 29.0%. Reported NIMs for the bank declined sequentially by 18bp to 3.3% on lower yield on advances and slightly higher cost of deposits. The banks yield on advances declined by 16bp qoq to 11.1% on account of both a) interest reversal of `26cr on slipped accounts and b) full impact of base rate reduction in May 2012. The cost of deposits was slightly higher by 6bp qoq to 7.1%.

October 26, 2012

Indian Bank | 2QFY2013 Result Update

Exhibit 4: Business growth moderates in 2QFY2013

Adv. yoy chg (%) 25.0 20.0 15.0 10.0 73.8 73.4 Dep. yoy chg (%) 74.8 73.9 74.0 72.4 72.0 CDR (%, RHS) 76.0

Exhibit 5: CASA ratio declines sequentially

31.0 CASA ratio (%) CASA yoy growth (%, RHS) 20.0

30.0 9.5 29.0

13.0 11.1 8.8 9.8 10.0

23.5 18.6

18.2 17.8

20.0 14.2

13.8 15.0

29.8

30.2

30.5

29.3

2QFY12 3QFY12 4QFY12 1QFY13 2QFY13

Source: Company, Angel Research

70.0

28.0 2QFY12 3QFY12 4QFY12 1QFY13 2QFY13

Source: Company, Angel Research

29.0

5.0

10.8 12.9

Exhibit 6: 16bp qoq lower yield on advances led to...

(%) 14.00 12.00 10.00 8.00 6.00 4.00 2QFY12 3QFY12 4QFY12 1QFY13 2QFY13 12.07 11.66 10.90 11.29 11.13

Exhibit 7: ...18bp qoq fall in reported NIM

(%) 4.00 3.60 3.20 2.80 2.40 2.00 2QFY12 3QFY12 4QFY12 1QFY13 2QFY13 3.76 3.58 3.16 3.30 3.12

Source: Company, Angel Research

Source: Company, Angel Research

Growth in non-interest income (excluding treasury) remained muted

During 2QFY2013, the growth in non-interest income (excluding treasury) for the bank remained muted at 3.7% yoy to `333cr, despite being aided by interest on IT refund amounting to `101cr. The treasury income for the quarter came in at `30cr vis--vis `21cr in 2QFY2012, while recoveries from written-off accounts were strong at `53cr compared to `40cr in 2QFY2012.

Slippages higher due to one chunky account

On the asset quality front, slippages came in at `734cr (included one chunky account of `360cr - currently referred to CDR) compared to `232cr in 1QFY2013 and quarterly average of `425cr since 1QFY2011. The annualized slippage ratio came in at 3.3%, much higher than 1.0% witnessed in 1QFY2013 and average run rate of 2.4% since 1QFY2011. On an absolute basis, both gross and net NPA levels increased by 27.4% and 30.8%, respectively. While the gross NPA ratio increased by 40bp sequentially to 2.1% from 1.7% in 1QFY2013, the increase in the net NPA ratio was by 29bp to 1.3% from 1.0% in 1QFY2013. The Provisioning coverage ratio (PCR) for the bank dipped sequentially by 411bp to 71%.

October 26, 2012

Indian Bank | 2QFY2013 Result Update

During the quarter, the bank restructured ~`675cr worth of advances, thereby taking its outstanding restructured book to `10,349cr as of 2QFY2013. As per the management, no major restructuring is in the pipeline except for `360cr of the aforementioned exposure which is under CDR.

Exhibit 8: Asset quality deteriorates sequentially

Gross NPAs (%) 2.2 1.7 1.2 70.1 0.7 79.4 76.5 75.1 71.0 75.0 70.0 Net NPAs (%) NPA coverage (%, RHS) 85.0 80.0

Exhibit 9: Slippage ratio spikes in 2QFY2013

Slippages (%) 6.0 5.0 4.0 3.0 2.0 1.0 2QFY12 3QFY12 4QFY12 1QFY13 2QFY13 0.3 0.3 0.3 0.7 1.4 Credit cost (%, RHS) 1.6 1.4 1.2 1.0 0.8 0.6 0.4

1.2 0.7

1.4 0.8

2.0 1.3

1.7 1.0

2.1 1.3

2.0

1.6

5.5

1.0

3.3

0.2 -

0.2 2QFY12 3QFY12 4QFY12 1QFY13 2QFY13

Source: Company, Angel Research

65.0

Source: Company, Angel Research

Exhibit 10: Cost-to-income ratio stabilizes

Staff exps (` cr) Other opex (` cr) CIR (%, RHS)

Exhibit 11: Opex-to-average asset trends

Cost-to-income ratio (%) 44.0 40.0 30.0 20.0 42.0 40.0 38.0 1.6 1.5 1.7 1.7 1.5 Opex to average assets (%, RHS) 1.8 1.7 1.6 1.5

750 600

42.6 37.7 37.2

38.9

38.9

206

190

450 300

168

166

197

37.7

37.2

42.6

38.9

367

372

386

369

379

150 -

10.0 -

38.9

36.0 34.0

1.4 1.3

2QFY12 3QFY12 4QFY12 1QFY13 2QFY13

Source: Company, Angel Research

2QFY12 3QFY12 4QFY12 1QFY13 2QFY13

Source: Company, Angel Research

October 26, 2012

Indian Bank | 2QFY2013 Result Update

Investment arguments
Indian Bank's performance has broadly been positive and balanced since its listing in 2007, leading to a gradual improvement in the quality of earnings, visible amongst other things in the substantial ~50bp decline in the bank's operating costs as a percentage of assets.

Rural and semi-urban presence relatively high, moderate CASA

Indian Bank opened 136 branches in the last 18 months, taking its total branch network to 1,999 as of 2QFY2013. The bank has a higher proportion of rural and semi-urban presence (~55% of its total branches). Aided by this, the bank has been able to maintain a moderate CASA in the vicinity of 30%, with the CASA registering a 17.2% CAGR during FY200712.

Investment concerns
Relatively high yields
A larger portion of SME and mid-corporate loans has contributed to the banks relatively high yield on advances. This has supported its NIM, which in FY2012 was higher than even larger banks having ~40% CASA deposits vs Indian Banks ~30%. Past experience shows that banks that delivered high NIMs on the back of high yields later paid the price for the higher risk taken in the form of higher NPAs in subsequent years. The bank had felt the heat on the asset-quality front in 4QFY2012, with significant increase in slippages and higher restructuring. Even in 1HFY2013, though recoveries are higher mainly from the slippages of 4QFY2012, fresh slippages are still on the higher side and hence we remain cautious on the banks asset quality and NIM outlook as in case of other banks with unsustainably high yields.

Outlook and valuation

The stock currently trades at 0.7x FY2014E ABV, below its eight-year trading range (0.8x-1.3x) and median of 1.0x. However, in our view, upsides are likely to be lower than peers, as we remain circumspect on the banks high RoAs and remain cautious on its asset quality. Hence, we recommend a Neutral rating on the stock.

October 26, 2012

Indian Bank | 2QFY2013 Result Update

Exhibit 12: Key assumptions

Particulars (%) Credit growth Deposit growth CASA ratio NIM Other income growth Growth in staff expenses Growth in other expenses Slippages Coverage ratio
Source: Company, Angel Research

Earlier estimates FY2013E 14.0 14.0 29.3 3.4 (9.1) 5.0 12.0 1.7 75.0 FY2014E 15.0 15.0 28.1 3.4 2.0 15.0 15.0 2.3 75.0

Revised estimates FY2013E 14.0 14.0 29.3 3.2 (6.8) 5.0 12.0 1.7 75.0 FY2014E 15.0 15.0 28.1 3.2 (0.3) 15.0 15.0 2.0 75.0

Exhibit 13: Change in estimates

Particulars (` cr) NII Non-interest income Operating income Operating expenses Pre-prov. profit Provisions & cont. PBT Prov. for taxes PAT Earlier estimates 4,942 1,120 6,062 2,346 3,716 1,069 2,648 859 1,789 FY2013 Revised % chg estimates 4,726 (4.4) 1,148 5,874 2,346 3,528 2,616 824 1,792 2.5 (3.1) (5.1) (1.2) (4.1) 0.2 FY2014 Earlier estimates 5,675 1,143 6,818 2,697 4,121 1,406 2,715 881 1,834 Revised % chg estimates 5,407 (4.7) 1,144 6,551 2,697 3,854 2,730 886 1,844 0.1 (3.9) (6.5) 0.6 0.6 0.6

912 (14.6)

1,124 (20.0)

Source: Company, Angel Research

Exhibit 14: P/ABV bands

Price(`) 600 500 400 300 200 100 0
Sep-07 Sep-08 Sep-09 Sep-10 Sep-11 Dec-07 Dec-08 Dec-09 Dec-10 Dec-11 Sep-12 Jun-07 Jun-08 Jun-09 Jun-10 Jun-11 Jun-12 Mar-07 Mar-08 Mar-09 Mar-10 Mar-11 Mar-12 Dec-12 Mar-13

0.5x

0.8x

1.1x

1.4x

1.7x

Source: Company, Angel Research

October 26, 2012

Indian Bank | 2QFY2013 Result Update

Exhibit 15: Recommendation summary

Company AxisBk FedBk HDFCBk ICICIBk* SIB YesBk AllBk AndhBk BOB BOI BOM CanBk CentBk CorpBk DenaBk IDBI# IndBk IOB J&KBk OBC PNB SBI* SynBk UcoBk UnionBk UtdBk VijBk Reco. Buy Neutral Neutral Buy Accumulate Buy Neutral Reduce Accumulate Accumulate Neutral Accumulate Neutral Accumulate Neutral Accumulate Neutral Neutral Neutral Neutral Accumulate Accumulate Neutral Neutral Accumulate Buy Neutral CMP (`) 1,231 488 637 1,078 22 413 135 108 761 287 53 424 71 405 106 96 178 75 1,149 309 749 2,173 119 76 206 65 55 Tgt. Price (`) 1,439 1,245 25 483 97 860 330 449 447 108 842 2,353 226 78 Upside (%) 16.9 15.5 12.8 16.8 (9.5) 13.0 14.9 5.9 10.4 13.2 12.4 8.3 9.9 19.4 FY2014E P/ABV (x) 1.7 1.2 3.6 1.7 0.9 2.1 0.5 0.7 0.9 0.7 0.7 0.8 0.7 0.7 0.7 0.6 0.6 0.5 1.0 0.7 0.8 1.4 0.7 0.8 0.7 0.5 0.7 FY2014E Tgt. P/ABV (x) 2.0 2.0 1.1 2.5 0.6 1.0 0.8 0.8 0.7 0.7 0.9 1.5 0.8 0.55 FY2014E P/E (x) 8.9 9.4 17.7 13.1 5.7 9.8 3.6 4.4 5.5 4.2 4.6 5.0 3.4 4.0 4.4 4.2 4.3 3.5 6.1 4.7 4.5 8.4 4.4 4.6 4.4 2.9 4.8 FY12-14E CAGR in EPS (%) 16.0 6.7 27.9 20.9 4.2 23.5 (0.4) 1.0 6.4 20.8 35.5 7.2 100.1 (2.2) 3.1 20.1 2.8 27.1 6.5 29.0 7.4 21.7 11.5 7.9 19.8 20.7 12.1 FY2014E RoA (%) 1.6 1.1 1.9 1.4 0.9 1.5 0.9 0.9 1.0 0.8 0.7 0.9 0.6 0.8 0.8 0.9 1.1 0.6 1.3 0.9 1.0 1.0 0.7 0.6 0.8 0.7 0.5 FY2014E RoE (%) 20.2 13.3 22.0 15.5 16.9 23.5 15.7 15.3 17.0 16.3 15.5 15.3 14.7 15.1 15.9 14.4 16.3 13.6 17.7 14.4 17.3 17.7 16.6 14.4 16.3 16.2 13.0

Source: Company, Angel Research; Note: *Target multiples=SOTP Target Price/ABV (including subsidiaries), # Without adjusting for SASF

Company Background
Indian Bank is a Chennai-based mid-sized public sector bank, with 1,999 branches and a balance sheet size of ~`1.5lakh cr. Around two-thirds of the bank's branches are spread across the southern states with majority being in the parent state of Tamil Nadu (~43%).

October 26, 2012

Indian Bank | 2QFY2013 Result Update

Income statement (Standalone)

Y/E March (` cr) NII - YoY Growth (%) Other Income - YoY Growth (%) Operating Income - YoY Growth (%) Operating Expenses - YoY Growth (%) Pre-Provision Profit - YoY Growth (%) Prov. & Cont. - YoY Growth (%) Profit Before Tax - YoY Growth (%) Prov. for Taxation - as a % of PBT PAT - YoY Growth (%) Preference Dividend PAT avl. To equity sh. - YoY Growth (%) FY08 1,992 6.4 1,068 29.7 3,060 13.5 1,400 12.3 1,659 14.6 424 (24.8) 1,235 39.7 226 18.3 1,009 32.8 40 969 33.9 FY09 2,609 31.0 1,035 (3.0) 3,644 19.1 1,415 1.1 2,229 34.3 443 4.3 1,786 44.6 541 30.3 1,245 23.5 43 1,203 24.1 FY10 3,161 21.2 1,316 27.1 4,478 22.9 1,730 22.3 2,747 23.3 396 (10.6) 2,352 31.7 797 33.9 1,555 24.9 46 1,509 25.5 FY11 4,036 27.7 1,182 (10.2) 5,218 16.5 1,926 11.3 3,292 19.8 657 66.1 2,634 12.0 920 34.9 1,714 10.2 46 1,668 10.5 FY12 4,418 9.5 1,232 4.3 5,650 8.3 2,187 13.5 3,463 5.2 1,195 81.9 2,268 (13.9) 521 23.0 1,747 1.9 46 1,701 2.0 FY13E 4,726 7.0 1,148 (6.8) 5,874 4.0 2,346 7.3 3,528 1.9 912 (23.7) 2,616 15.3 824 31.5 1,792 2.6 46 1,745 2.6 FY14E 5,407 14.4 1,144 (0.3) 6,551 11.5 2,697 15.0 3,854 9.2 1,124 23.2 2,730 4.4 886 32.4 1,844 2.9 46 1,798 3.0

Balance sheet (Standalone)

Y/E March (` cr) Share Capital Equity Preference Reserves & Surplus Deposits - Growth (%) Borrowings Tier 2 Capital Other Liab. & Prov. Total Liabilities Cash Balances Bank Balances Investments Advances - Growth (%) Fixed Assets Other Assets Total Assets - Growth (%) FY08 830 430 400 4,381 61,046 29.6 1,283 216 2,752 70,508 6,433 340 21,915 39,839 37.1 539 1,442 70,508 25.6 FY09 830 430 400 6,306 72,582 18.9 531 300 3,573 6,212 472 22,801 51,465 29.2 1,594 1,578 19.3 FY10 830 430 400 7,442 21.6 657 300 3,932 7,061 1,052 28,268 62,146 20.8 1,580 1,282 20.5 FY11 830 430 400 8,691 19.9 800 1,300 4,293 6,878 1,684 34,784 75,250 21.1 1,606 1,516 20.1 FY12 830 430 400 9,972 14.2 3,783 1,090 4,941 6,319 2,494 37,976 20.0 1,631 2,676 16.2 FY13E 830 430 400 11,317 14.0 4,302 1,063 5,619 6,197 2,837 44,002 14.0 1,799 3,043 13.7 FY14E 830 430 400 12,715 15.0 4,931 1,036 6,477 6,335 3,252 50,875 15.0 2,000 3,488 14.6

88,228 105,804 120,804 137,716 158,374

84,122 101,389 121,718 141,419 160,847 184,364

90,324 102,969 118,414

84,122 101,389 121,718 141,419 160,847 184,364

October 26, 2012

Indian Bank | 2QFY2013 Result Update

Ratio analysis
Y/E March Profitability ratios (%) NIMs Cost to Income Ratio RoA RoE B/S ratios (%) CASA Ratio Credit/Deposit Ratio CAR - Tier I Asset Quality (%) Gross NPAs Net NPAs 1.2 0.2 1.5 0.6 79.9 22.5 3.0 7.9 1.7 1.7 3.1 0.7 2.5 0.4 2.9 1.3 4.2 2.2 2.0 0.4 1.6 16.2 25.8 0.9 0.2 0.6 0.0 79.6 28.0 5.0 6.4 1.4 2.8 3.4 0.6 2.8 0.3 3.1 1.1 4.1 1.8 2.3 0.7 1.6 15.3 24.7 0.8 0.2 1.1 0.4 93.6 35.1 154.7 6.5 5.1 1.2 3.6 3.4 0.4 3.0 0.4 3.4 1.0 4.4 1.9 2.5 0.9 1.7 15.3 25.6 1.0 0.5 1.5 0.6 84.3 38.8 184.4 7.5 4.6 1.0 4.2 3.6 0.6 3.0 0.1 3.2 0.9 4.1 1.7 2.4 0.8 1.5 15.3 23.5 2.0 1.3 2.5 0.6 70.1 39.6 210.4 7.5 4.5 0.8 4.2 3.4 0.9 2.4 0.1 2.5 0.9 3.4 1.7 1.7 0.4 1.3 15.3 20.4 2.4 1.2 1.7 0.5 75.0 40.6 246.2 8.0 4.4 0.7 4.5 3.1 0.6 2.5 0.0 2.6 0.7 3.3 1.6 1.7 0.5 1.2 15.3 18.1 3.3 1.3 2.0 0.6 75.0 41.8 278.8 8.0 4.3 0.6 4.5 3.1 0.7 2.5 0.0 2.5 0.6 3.1 1.6 1.6 0.5 1.1 15.3 16.3 32.3 65.3 12.9 11.4 31.6 70.9 13.3 11.3 32.2 70.4 12.7 11.1 30.9 71.1 13.6 11.0 30.6 74.8 13.5 11.1 29.3 74.8 13.3 11.2 28.1 74.8 12.9 11.0 3.2 45.8 1.6 25.8 3.5 38.8 1.6 24.7 3.5 38.6 1.7 25.6 3.7 36.9 1.5 23.5 3.5 38.7 1.3 20.4 3.2 39.9 1.2 18.1 3.2 41.2 1.1 16.3 FY08 FY09 FY10 FY11 FY12 FY13E FY14E

Slippages
Loan loss prov. /avg. assets Provision Coverage Per Share Data (`) EPS ABVPS DPS Valuation Ratios PER (x) P/ABVPS (x) Dividend Yield DuPont Analysis (%) NII (-) Prov. Exp. Adj. NII Treasury Int. Sens. Inc. Other Inc. Op. Inc. Opex PBT Taxes RoA Leverage (x) RoE

106.9 127.5

October 26, 2012

10

Indian Bank | 2QFY2013 Result Update

Research Team Tel: 022 - 39357800

E-mail: research@angelbroking.com

Website: www.angelbroking.com

DISCLAIMER
This document is solely for the personal information of the recipient, and must not be singularly used as the basis of any investment decision. Nothing in this document should be construed as investment or financial advice. Each recipient of this document should make such investigations as they deem necessary to arrive at an independent evaluation of an investment in the securities of the companies referred to in this document (including the merits and risks involved), and should consult their own advisors to determine the merits and risks of such an investment. Angel Broking Limited, its affiliates, directors, its proprietary trading and investment businesses may, from time to time, make investment decisions that are inconsistent with or contradictory to the recommendations expressed herein. The views contained in this document are those of the analyst, and the company may or may not subscribe to all the views expressed within. Reports based on technical and derivative analysis center on studying charts of a stock's price movement, outstanding positions and trading volume, as opposed to focusing on a company's fundamentals and, as such, may not match with a report on a company's fundamentals. The information in this document has been printed on the basis of publicly available information, internal data and other reliable sources believed to be true, but we do not represent that it is accurate or complete and it should not be relied on as such, as this document is for general guidance only. Angel Broking Limited or any of its affiliates/ group companies shall not be in any way responsible for any loss or damage that may arise to any person from any inadvertent error in the information contained in this report. Angel Broking Limited has not independently verified all the information contained within this document. Accordingly, we cannot testify, nor make any representation or warranty, express or implied, to the accuracy, contents or data contained within this document. While Angel Broking Limited endeavours to update on a reasonable basis the information discussed in this material, there may be regulatory, compliance, or other reasons that prevent us from doing so. This document is being supplied to you solely for your information, and its contents, information or data may not be reproduced, redistributed or passed on, directly or indirectly. Angel Broking Limited and its affiliates may seek to provide or have engaged in providing corporate finance, investment banking or other advisory services in a merger or specific transaction to the companies referred to in this report, as on the date of this report or in the past. Neither Angel Broking Limited, nor its directors, employees or affiliates shall be liable for any loss or damage that may arise from or in connection with the use of this information. Note: Please refer to the important `Stock Holding Disclosure' report on the Angel website (Research Section). Also, please refer to the latest update on respective stocks for the disclosure status in respect of those stocks. Angel Broking Limited and its affiliates may have investment positions in the stocks recommended in this report.

Disclosure of Interest Statement 1. Analyst ownership of the stock 2. Angel and its Group companies ownership of the stock 3. Angel and its Group companies' Directors ownership of the stock 4. Broking relationship with company covered

Indian Bank No No No No

Note: We have not considered any Exposure below ` 1 lakh for Angel, its Group companies and Directors

Ratings (Returns):

Buy (> 15%) Reduce (-5% to -15%)

Accumulate (5% to 15%) Sell (< -15%)

Neutral (-5 to 5%)

October 26, 2012

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