Indian Bank has witnessed a remarkable surge in its shares, with a substantial gain of 117.6% over the past year, significantly outperforming the Nifty 50 index’s 15% rise during the same period.
On Monday, Indian Bank’s stock experienced a notable uptick, increasing by 1.8% during early trading. This surge followed the revelation of fraudulent non-performing assets (NPAs) amounting to Rs 24.76 crore ($3.3 million) reported to the Reserve Bank of India (RBI). The implicated parties in this case include Samsarapu Polaraju, Samsarapu Narasimha Raju, Maheswari Constructions & Engineering Works, and S V Exports.
This recent boost in share price comes on the heels of Indian Bank’s strategic alliance announcement made on Thursday, October 13, where the bank partnered with subsidiaries of Tata Motors (NYSE: TTM). The collaboration aims to provide digital inventory financing solutions through Indian Bank’s supply-chain finance platform.
While the bank has encountered some challenges, such as weak earnings and potential cash flow issues leading to dividend cuts, as noted by InvestingPro Tips, it is noteworthy that Indian Bank has managed to raise its dividend for three consecutive years. This, coupled with the prospect of sales growth in the current year, suggests a positive outlook for the bank.
InvestingPro’s data also sheds light on the bank’s lower earnings quality, as free cash flow lags behind net income. Nevertheless, the bank is trading at a lower price-to-earnings (P/E) ratio concerning its expected near-term earnings growth, which could be an appealing factor for potential investors. For more detailed real-time metrics, interested parties may explore the InvestingPro platform.
