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The market expects Bank of India to carry on much as it has.
At today’s share price, buyers are assuming Bank of India earns about 10% a year on the money invested in it, from here on. Over the last ten years it actually earned about 12.1% a year. The two are close, so the share price does not need the business to improve or to stumble. It needs it to keep doing roughly what it already does.
- How it is valued: Excess return — the correct lens for a bank.
- What the price assumes: 10.0% return on equity, against 12.1% the model takes from its own record.
- Ten-year record: Between FY2020 and FY2026, Bank of India's revenue went from ₹49,400 crore to ₹85,650 crore — it compounded at about 10% a year over 6 years.
- Biggest swing factor: Credit costs. Main risk: Asset quality.
01A Mumbai bank with global branches
Bank of India, founded in Mumbai in 1906, is a public-sector bank majority-owned by the Government of India. It has a large domestic branch network and an unusually big overseas presence for an Indian bank.
It spent the late 2010s provisioning for bad corporate loans and has since rebuilt profits on lower credit costs.
02What the market is assuming
Work backwards from today's share price and you can see what buyers are quietly taking for granted. Here is the return on equity that price implies for Bank of India, next to what the model assumes from the company's own record.
The further apart these two numbers are, the bigger the bet a buyer at today's price is making.
03Bank of India's record, in plain numbers
Between FY2020 and FY2026, Bank of India's revenue went from ₹49,400 crore to ₹85,650 crore — it compounded at about 10% a year over 6 years. It reported a net loss in FY2020, and closed the period with net profit of ₹10,089 crore. In FY2026 it kept 11.8% of revenue as net profit — its best year in the period. The latest year added 6.5% to revenue, well behind its own long-run pace. FY2022 is missing from the filed series used here, so that year is left out rather than estimated.
Revenue and earnings per share in ₹, return on equity and leverage as ratios — all from the filed statements.
Revenue and net profit by year (₹ crore)
| Year | Revenue | Net profit | Margin |
|---|---|---|---|
| FY2020 | 49,400 | -2,929 | -5.9% |
| FY2021 | 48,350 | 2,199 | 4.5% |
| FY2023 | 55,143 | 3,882 | 7.0% |
| FY2024 | 67,306 | 6,385 | 9.5% |
| FY2025 | 80,412 | 9,339 | 11.6% |
| FY2026 | 85,650 | 10,089 | 11.8% |
04How Bank of India gets valued — and why
Excess return — the correct lens for a bankA bank is not valued with a discounted cash flow. Deposits are its raw material and interest is operating income, so enterprise value means nothing here. It is valued on excess return instead — the profit it earns above the cost of the equity funding it.
05What decides Bank of India's value
Credit costs
Lower provisions drove the recovery.
Return on equity
Whether returns hold through the cycle.
Overseas book
International branches add diversification.
Recoveries
Collections on old bad loans add profit.
06What could go wrong
- Asset quality. A new downturn would raise provisions.
- Policy lending. Government priorities shape lending.
- Capital. Growth may need fresh equity.
07What the full Bank of India valuation shows
Sign in free to see the complete Bank of India valuation
- ✓Fair value per share — from the excess-return model banks are valued on
- ✓The bank workpaper — book value, cost of equity and sustainable return, step by step
- ✓Bull, base and bear cases — and exactly which assumptions move between them
- ✓Peer comparison — against SBI, Bank of Baroda and Union Bank
- ✓Downloadable report — the full write-up, yours to keep
08Questions people ask about Bank of India
When was Bank of India founded?
In 1906, in Mumbai.
Is Bank of India government-owned?
Yes, the Government of India holds the majority.
How is Bank of India valued?
On excess return: what it earns above its cost of equity.
Is Bank of India overvalued?
At ₹154 the market is pricing in roughly 10.0% sustained ROE, against the ~12.1% its own record supports. That is less than it has delivered — on these numbers the market is asking the business for less than its own record, which usually means it doubts the record repeats.
What is the intrinsic value of Bank of India?
It is computed from the filed financial statements using the method that fits this business (excess return), with every assumption shown alongside the result. The per-share figure and the full working are in the report.
How much debt does Bank of India carry?
Debt to equity stands at 1.39, against 1.22 at the start of the period — the balance sheet is a core input to the cost of capital used here.