Indian Bank downgraded to 'Hold' by MarketsMOJO, strong fundamentals and positive results

Indian Bank, one of the leading public banks in India, has recently been downgraded to a 'Hold' by MarketsMOJO on October 21, 2024. This decision was based on the company's strong provisioning practices, with a Provision Coverage Ratio of 77.58%, and its long-term fundamental strength, with a 78.89% CAGR growth in net profits.
The company has also shown healthy long-term growth, with an annual growth rate of 28.35% in Net Interest Income (ex other income) and 78.89% in net profit. In addition, Indian Bank has declared positive results for the last 9 consecutive quarters, with the lowest Gross NPA(Q) at 3.77%, highest NII(Q) at Rs 6,178.09 cr, and highest Interest Earned(Q) at Rs 15,039.23 cr.

However, the technical trend for the stock is currently sideways, indicating no clear price momentum. The trend has also deteriorated from Mildly Bullish on October 21, 2024, and has generated -1.27% returns since then.

Indian Bank also has an attractive valuation, with a ROA of 1.1 and a price to book value of 1.2. The stock is currently trading at a fair value compared to its average historical valuations. In the past year, while the stock has generated a return of 21.16%, its profits have risen by 51.6%, resulting in a PEG ratio of 0.2.

It is worth noting that Indian Bank has a high institutional holding of 22.34%, indicating that these investors have better capability and resources to analyze the company's fundamentals compared to most retail investors.

However, the stock has underperformed the market in the last 1 year, with a return of 21.16% compared to the market (BSE 500) returns of 34.48%. Overall, while Indian Bank has shown strong fundamentals and positive results, the current technical trend and underperformance in the market suggest a 'Hold' call for the stock.