Indian Bank’s shares have experienced a remarkable surge over the past year, with a substantial gain of 117.6%, far outperforming the Nifty 50 index, which saw a 15% rise during the same period.
In early trading on Monday, the bank’s shares rose by 1.8% following the disclosure of fraudulent non-performing assets (NPAs) worth Rs 24.76 crore ($3.3 million) to the Reserve Bank of India (RBI). The fraudulent NPAs involve various parties, including Samsarapu Polaraju, Samsarapu Narasimha Raju, Maheswari Constructions & Engineering Works, and S V Exports.
This recent increase in share price comes shortly after Indian Bank’s announcement of a strategic partnership with Tata Motors (NYSE: TTM) subsidiaries on Thursday, October 13. The collaboration is aimed at offering digital inventory financing solutions through Indian Bank’s supply-chain finance platform.
Despite certain challenges, such as concerns over poor earnings and cash flow that may lead to dividend reductions, as highlighted by InvestingPro Tips, Indian Bank has consistently increased its dividend for the past three years. This, along with expectations of sales growth in the current year, suggests a positive outlook for the company.
InvestingPro data also notes that the bank has relatively low earnings quality, with free cash flow trailing net income. However, the bank’s low price-to-earnings (P/E) ratio in relation to near-term earnings growth may be an appealing aspect for potential investors. For more comprehensive and real-time metrics, potential investors are encouraged to explore the InvestingPro platform.