Dividend Value Play In Bank Of India

$BANKINDIA Bank of India, a public sector lender across retail, agriculture, MSME, corporate and overseas banking, is trading in value territory. At about 0.7x FY26 book value, it remains well below the PSU banking median of around 1.0x, while offering a dividend yield of roughly 3.2%. This combination provides valuation support, though a meaningful rerating depends on stronger margins and profitability. FY26 performance was steady. Net interest income grew around 3% YoY to ₹25,172 crore, while net profit increased nearly 14% to ₹10,527 crore, helped by a 10% rise in non-interest income to ₹9,874 crore. However, global net interest margin declined to 2.52% from 2.82% in FY25, limiting earnings momentum despite ROE of 12.4% and ROCE of 5.9%. Balance sheet growth remains healthy. Global advances rose 15.8% to ₹7.7 lakh crore, while deposits increased 13.6% to ₹9.3 lakh crore. Retail, agriculture and MSME loans grew 19.1% and now account for 58.7% of advances, improving portfolio quality. Asset quality also strengthened, with gross NPA at 1.98%, net NPA at 0.56%, and a low slippage ratio of 0.83%. Management expects FY27 advances to grow 15–16% and deposits 13–14%, supported by a ₹65,000–70,000 crore credit pipeline spanning roads, power, data centres, EVs, solar, biogas and gas transmission. Expansion continues, with over 200 new branches planned in FY27 alongside initiatives such as Project UDAAN and Zonal Deposit Centers to improve CASA. Overall, Bank of India appears to be a value play rather than a high-growth story. Attractive valuation, healthy asset quality, stable dividend and loan growth support downside protection, but sustained margin improvement and stronger NII growth will be crucial for a meaningful rerating and stronger shareholder returns.