Indian Overseas Bank profit up by 30 % to ₹1,051 crore in Q4. Shares nearing ₹38. NPAs down, capital raise of ₹5,000 crore has been approved. Is IOB the next PSU multibagger?
IOB Q4 Profit Soars 30%; Stock at ₹38. Is This PSU Bank the Next Big Multibagger?
Indian Overseas Bank Stuns Street with Dazzling FY25 Results
The market is above Indian Overseas Bank (IOB), which sprung a surprise with an impressive 30% increase in net profit for the March quarter of FY25. From ₹808 crore a year ago, the Chennai-headquartered public sector bank reported a net profit of ₹1,051 crore. Backed up by increasing interest income and declining bad loans, this performance indicates a robust turnaround for the bank. For the full year, net profit surged 26% to ₹3,335 crore, while there was a record total income at ₹33,676 crore-making a fresh benchmark in the PSU banking sector.
NPAs Hit Multi-Year Low-Asset Quality Rebounds Strongly
IOB’s asset quality was by far its brightest win. Gross NPAs fell from 3.10% to 2.14%, while net NPAs plunged from 0.57% to just 0.37%. This coupled with a significant clean-up of the loan book and boosts improved credit discipline within the bank. While total income of the bank raised to Rs. 9,215 crore in Q4 of the current financial year up from Rs. 9,106 crore in the same period last year. Interest income also grew to Rs. 7,634 crore indicating strong demand for loans and improved lending margins.
Approved ₹5,000 Crores Capital Raise-Growth Engine Ready
As part of the aggressive growth strategy being streamlined by IOB, the Board of Directors has approved raising up to ₹5,000 crore through issuances of bonds and through equity. Part of this will be ₹4,000 crore targeted towards FY26 through follow-on public offer, rights issue or QIPs. The capital infusion will empower the bank significantly to raise further its l .
With the aid of this capital infusion, the bank will have a very strong competitive advantage in expanding its loan book and boosting digital banking infrastructure.
IOB Stock at ₹38: Your Smart Bet Prior to the Boom
The shares of IOB, which is currently trading at ₹37.85, have mostly maintained between very slight increases. The highest point in the 52-week timeline is at Rs. 75.45 while the low is at Rs. 33.01. With a wonderful earning report and less NPAs, IOB is in the market’s gazes for a new fundraising plan in motion and is being considered as a potential multibagger.
Retail investors have started to open up their portfolios into IOB’s value proposition in PSU banks. In conjunction with the recovery of the Indian economy and tailwinds of digital banking, this should be the hottest entry point into the market.
