Bank of India (BANKINDIA)

FairStock Score: 81/100 — HIGH CONVICTION

Score breakdown: P/E: 3/3 · ROCE: 0/2 · Growth: 1/2 · Dividend: 1/1

Key Financials

Strengths

• Trades at a P/B of 0.85, below book value of ₹177.32, with Graham Number of ₹300.54 and margin of safety of 41.42%.
• Piotroski F-Score of 8/9 and profit growth of 15.26% against 7.87% sales growth point to improving operating efficiency.
• Latest quarter net profit of ₹2,814 Cr on sales of ₹19,052 Cr, plus free cash flow of ₹17,680 Cr and a 2.30% dividend yield, reward patient capital.
• P/E of 7.86 is modest relative to reported profit growth, giving a reasonable earnings yield for a large-cap PSU bank.
• FairStock Score of 74/100 (STEADY) corroborates a stable, improving-quality business rather than a speculative balance-sheet story.

Concerns

• High leverage: D/E of 11.69 and Altman Z-Score of 0.36 would signal distress in an industrial; in a bank they demand extra vigilance on asset quality.
• Low ROCE of 6.17% and an EV/EBITDA of 1686.42 show that a bank's ratios are distorted by debt, so apparent cheapness can be misleading.
• High promoter holding of 73.38% means minority shareholders have limited influence and government policy priorities may affect capital allocation.
• The price is ₹150.85, well off the 52-week low of ₹109.85, so the current discount to book is not a crash-induced bargain.

AI Analysis

At ₹150.85, Bank of India is selling at 0.85 times book value of ₹177.32. In Graham's language, a rupee of net assets is available for 85 paise. The Graham Number of ₹300.54 and a stated margin of safety of 41.42% tell me the market is pricing in pessimism. I do not rely on the DCF of ₹572.45, because for a bank, terminal value assumptions are suspect. But I do note that even a conservative asset-based check leaves room. The quality is not exceptional. This is a public sector bank with 73.38% promoter holding, and the low 6.17% ROCE reflects a leveraged balance sheet. A D/E of 11.69 would terrify me in a manufacturing business, but for a bank it has to be judged alongside ROE of 12.17% and book value support. The Piotroski F-Score of 8/9 is a strong signal that the financial picture is improving, not deteriorating. Profit grew 15.26% while sales grew 7.87%, so operating discipline is working. The latest quarter delivered ₹2,814 Cr net profit on ₹19,052 Cr sales, and free cash flow is ₹17,680 Cr. I also receive a 2.30% dividend yield while waiting. This is not a fast grower; it is an asset play. The risk is that the discount to book is deserved because public sector banks can destroy book value in bad credit cycles. The Altman Z-Score of 0.36 is a reminder that banks are fragile when leverage or defaults turn ugly. I would buy only with eyes open, watching book value per share and whether 15.26% profit growth can be sustained without taking excessive risk.

Data from BSE/NSE filings. AI analysis is for educational purposes only — not investment advice. Scoring methodology · Disclaimer