Indian Bank posted a set of very good numbers for Q2FY20, with major improvement in operational numbers as well as asset quality. Yet the stock figures in the top five losers on the BSE since opening bell. The stock price fell 4.5% to Rs.136.50 but this could be profit booking post the earnings as it has been gaining for 5 consecutive days.

The Bank’s net profit came in at Rs.359 crore for Q2 FY2020, UP 139%, mainly on account of robust growth of 72% in other income AT Rs.738 crore.  This jump in other income was due to profit on sale of investments to the tune of Rs.249 crore v/s Rs.5 crore (YoY).  Total income of the Bank for the quarter was Rs.6045 crore, up 18%.

Net interest margin (NIM) (Domestic) declined by 9 basis points (bps) and touched 2.92% for the quarter ended September 30, 2019 as against 3.01% for the quarter ended September 30, 2018. On a sequential basis it improved by 7 bps from 2.85% to 2.92%.

Provisions and contingencies was at Rs. 1143 crore mainly due to higher provision towards Income Tax as against Rs.1041 crore (YoY). Sequentially it was up 14%.

Advances rose 13% driven mainly by retail loan growth where housing and vehicles showed a de-growth.

In terms of asset quality, Gross NPA fell 13 bps to 7.2% while Net NPA fell 30 bps to 3.54% (QoQ).

Stressed Advances as a percentage of Gross advances increased to 8.53% v/s 8.02% (YoY).