Indian Overseas Bank (IOB) Q2 FY27 Results Analysis: PAT Jumps 56%, GNPA Hits Record Low
Indian Overseas Bank reported Q2 FY27 numbers with revenue of Rs. 10,427.88 Cr (+13.17% YoY) and PAT growth of +55.94% YoY. Here's a quick read of what worked, what to watch, and what management said.
| Results date | October 26, 2026 |
|---|---|
| Quarter | Q2 FY 2026-2027 |
| Revenue (Q2) | Rs. 10,427.88 Cr (+13.17% YoY) |
| PAT (Q2) | Rs. 1,912.42 Cr (+55.94% YoY) |
| EBITDA margin | 28.93% (+288 bps YoY) |
| EPS (Q2) | Rs. 0.99 (+54.70% YoY) |
| Market cap | Rs. 55,978.93 Cr |
| CMP | Rs. 29.07 |
Quarter Snapshot
IOB delivered ahead of its own FY27 guidance on credit growth (25.00% vs 13-14% minimum), ROA (1.53% vs 1.4-1.5%) and credit cost (0.167% vs 0.35-0.40%), with PAT up 55.94% YoY and GNPA at a best-on-record 1.19%. Cost-to-income improved to 40.78% and PPOP rose 25.69% YoY, while the pending Rs.5,000 crore equity raise and a 76 bps QoQ CRAR drift are the main watch items. Other income fell 10.17% YoY and retail segment margins compressed, but the core operating engine accelerated on every bank metric.
Key Investment Insights
Key Positives
- Advances grew 25.00% YoY to Rs.3,42,060.58 crore, exceeding the 13-14% FY27 minimum guidance with two quarters to spare
- Deposits grew 20.16% YoY to Rs.4,07,428.18 crore, ahead of the 13-14% guidance
- Standalone PAT grew 55.94% YoY to Rs.1,912.42 crore; normalized PAT Rs.2,040.36 crore, +66.37% YoY
- PPOP grew 25.69% YoY to Rs.3,016.49 crore, rising for the fifth straight quarter
- GNPA fell to 1.19% (-14 bps QoQ, from 1.83% YoY), NNPA 0.16%, PCR 97.69%
- Credit cost 0.167% annualized vs 0.35-0.40% FY27 guidance; ROA 1.53% annualized vs 1.4-1.5% guidance
- Cost-to-income improved to 40.78% from 53.95% in Q1 and 45.76% YoY
- NII grew 26.41% YoY to Rs.3,866.98 crore, more than double total income growth of 13.17%
Risk Factors
- Other income declined 10.17% YoY and 43.22% QoQ, the only revenue line shrinking against 26.41% NII growth
- Other operating expenses rose 39.95% YoY, growing well ahead of income
- CRAR eased 76 bps QoQ to 18.60% (CET1 16.26% vs 16.88%) as risk-weight growth outpaced accretion
- Deposit growth (+20.16%) lags advances growth (+25.00%) by ~4.8 pp, a persisting funding gap
- Retail segment result fell 10.44% YoY with margin compression from 26.91% to 20.86%
- Provisions and contingencies rose 41.29% YoY to Rs.950.08 crore
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Disclaimer: This results analysis is published for educational and informational purposes only. It is not investment advice, not a recommendation to buy, sell or hold any security.