InvestorQ : Why was the EPS of Indian Bank down so sharply in this Sep-20 quarter?
Rashi Mehra made post

Why was the EPS of Indian Bank down so sharply in this Sep-20 quarter?

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Archita Jajjoo answered.
1 month ago
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During the Sep-20 quarter, the sales revenues of Indian Bank doubled and the net profit was also higher at Rs.458 crore. However, the EPS of Indian Bank was sharply down due to the massive dilution of capital during the year. That impacted the EPS on a yoy basis.

For the quarter, OPM was almost flat at 25.56% while net profit margins were 200 bps lower at 3.88%. However, the expanded equity reduced the EPS sharply. Although the capital adequacy was comfortable at 14.22% but it will need more capital to expand its loan book.

Corporate wholesale book accounted for 40% of revenues in the Sep-20 quarter, while the retail book accounted for 30%. Indian Bank saw dilution in equity due to the merger initiated with Allahabad Bank.

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