Tamilnad Mercantile Bank reports record net profit in the first quarter of the financial year

The public sector bank Bank of India reported a significant increase in net profit in the first quarter of the financial year 27. Net profit reached 3,068 crore rupees, representing a growth of 36.23% compared to the same period last year, which resulted from healthy credit growth.

Quarterly Financial Performance

Net Interest Income (NII) for the reporting period increased by 12.61% year-on-year, amounting to 6,833 crore rupees compared to 6,068 crore rupees in the first quarter of financial year 26. However, the Net Interest Margin (NIM) slightly decreased to 2.52%, down from 2.55% the previous year.

Non-interest income reached 2,579 crore rupees, showing a year-on-year growth of 19.07%. This growth was driven by an increase in write-off recoveries (up by 89.13% to 609 crore rupees) and profits from foreign exchange operations (increased by 113.21% to 226 crore rupees), despite the profit from sale and revaluation of investments decreasing by 49.51% to 414 crore rupees.

Operational Expenses and Asset Quality

Operating costs were contained and increased by only 3.22% year-on-year, reaching 4,361 crore rupees. Personnel expenses increased by 8.64% to 2,603 crore rupees, but this was partially offset by a reduction in insurance and other expenses. The cost-to-income ratio sharply improved, falling to 46.33% from 51.31% the previous year.

Regarding asset quality, the Gross Non-Performing Assets (NPA) ratio improved to 1.81% from 2.92%, and the Net NPA ratio decreased to 0.51% from 0.75%. The provisioning coverage ratio strengthened to 93.83% from 92.94% the previous year. Furthermore, the slippage ratio improved to 0.24% from 0.33%, and credit costs decreased to 0.15% from 0.17%.

Bank Operations and Plans

Radjnish Karnataka, Managing Director of Bank of India, noted that in the current quarter, gross cash slippage amounted to about 1,800 crore rupees, while gross cash recovery reached approximately 1,900 crore rupees, meaning that recovery exceeded slippage.

In terms of business, global loans grew by 18.64% year-on-year, reaching 797,775 crore rupees. The growth was driven by an increase in retail loans by 20.60% to 166,170 crore rupees and a surge in RAM (Retail, Agriculture, MSME) segment loans by 19.75% to 392,833 crore rupees, which now constitute 58.30% of total domestic loans. Total deposits increased by 14.90% year-on-year, reaching 957,924 crore rupees, pushing the bank's total business beyond 17.55 lakh crore rupees, demonstrating a growth of 16.57%.

Bank of India has set a target to mobilize $1.2 billion in FCNR(B) deposits, having already attracted over $200 million. NRI communities in countries such as Canada, USA, UK, Singapore, Hong Kong, Japan, and Africa are showing interest. The bank operates in 15 countries, including 4 in Africa.

These deposits, currently valued at approximately 6.5%, are more advantageous than large deposits because they do not require maintaining CRR/SLR and have an RBI-managed swap. BoI expects the mobilization of these funds to help reduce the overall cost of deposits by replacing more expensive large deposits (approximately equivalent to 12,000–13,000 crore rupees) to finance credit growth.

The bank also plans to offer customers the option to use leverage against FCNR(B) deposits up to 9 times, offering this directly without third-party involvement. According to RBI timelines, the FCNR(B) leverage component should be ready by September 30, and related overseas borrowings are permitted until December 31. Separately, in accordance with RBI directives on external financing, the bank aims to attract approximately $2 billion by December 31 through Medium Term Notes (MTNs) and associated borrowing, subject to favorable market conditions.

Karnataka added that it plans to raise about $2 billion by December 31 through external borrowing and MTNs, and this is a target dependent on the market. The bank's Capital to Risk-weighted Assets Ratio (CRAR) improved to 18.69% as of June 2026, compared to 17.39% the previous year, with CET-1 capital standing at 15.97%. The bank's Board of Directors approved plans to raise up to 7,500 crore rupees in financial year 27 through Additional Tier 1 bonds (2,500 crore rupees) and Tier II bonds (5,000 crore rupees).

HFCL, a manufacturer of domestic telecommunications equipment, announced on Wednesday that it achieved its highest ever consolidated profit of 245.64 crore rupees for the three months ending June 30, 2026.

First Quarter Financial Performance

Furthermore, the company increased its revenue growth forecast for the 2027 fiscal year, doubling it to 40 percent from the previously planned 20 percent. According to the company's statement, this success is attributed to demand from hyperscale data centers, growing exports, and improved production efficiency, which allowed for economies of scale.

It should be noted that in the same period a year earlier, HFCL recorded a loss of 29.3 crore rupees.

Reasons for Growth and New Opportunities

In an official statement, the company emphasized that its record financial results reflect the convergence of several structural growth factors. These factors include increasing demand from hyperscale data centers, improved product realization, operating leverage due to economies of scale, a diversified portfolio of high-tech products, and expanded export capabilities, all contributing to a significant improvement in all key financial indicators.

HFCL also demonstrated an all-time quarterly income high. The company's revenue more than doubled, reaching 1,914.98 crore rupees in the first quarter of the current fiscal year compared to 871 crore rupees recorded in the quarter of June 2025.

Orders and Export Activities

Mahendra Nahata, Managing Director of HFCL, stated that thanks to strategic initiatives taken, which are now yielding tangible results, the company has entered a new phase of accelerated and profitable growth. He expressed satisfaction that the company showed record figures in revenue, profitability, and order volume in the first quarter of the 2027 fiscal year.

HFCL achieved an all-time high order book of approximately 26,665 crore rupees, which is nearly five times the revenue of the 2026 fiscal year, strengthening long-term revenue visibility. Export revenue amounted to 1,063.30 crore rupees, accounting for approximately 55.53 percent of the total revenue for the reporting quarter. Moreover, export revenue grew more than fourfold compared to 209.7 crore rupees recorded in the quarter of June 2025.

Strategic Development and Defence Sector

Nahata noted that the confluence of artificial intelligence, digital infrastructure, optical communication, and defense modernization creates significant long-term prospects for the company. To further strengthen its leadership in optical communication, the board of directors approved the expansion of the manufacturing base for advanced data center communication products with investments of approximately 215 crore rupees. With its expanding technology portfolio, manufacturing capacity, and global presence, the company is well-positioned to create sustainable long-term value for its stakeholders.

The company announced its intention to continue developing its defence and aerospace business through the development of proprietary technologies, expansion of manufacturing capacity, and planned acquisitions. During the quarter under review, the company began the process of establishing its ammunition manufacturing complex in Andhra Pradesh for the production of multi-mode hand grenades, electronic fuses, and other products, while simultaneously strengthening its portfolio in radar surveillance systems, thermal imaging setups, and tactical communication solutions.

The statement also indicated that the company views the defence business as a strategic long-term growth driver, supported by sustained demand, strong political backing, and significant opportunities for value creation in the coming years.

The public sector lender Indian Overseas Bank (IOB) reported a significant increase in net profit of 49.3 percent year-on-year on Monday. Over the three months ending in June 2026, the bank earned 1,659 crore rupees, which was attributed to an improvement in asset quality.

Quarterly Financial Performance

In the same quarter last year, the bank had recorded a net profit of 1,111 crore rupees. According to the report submitted to the stock exchange system, total income for the period from April to June increased to 10,938 crore rupees compared to 8,866.47 crore rupees the previous year.

Improvement in Asset Quality

The bank's asset quality showed positive momentum. The Gross Non-Performing Assets (GNPA) ratio decreased to 1.33 percent for the June quarter of fiscal year 27, down from 1.97 percent the previous year. Similarly, Net NPA reduced to 0.18 percent from the previous 0.32 percent.

Other Details and Market Reaction

Furthermore, provisions amounted to 834 crore rupees in the quarter under review, which remained almost unchanged compared to 844 crore rupees the previous year, although this is less than the 1,006 crore rupees recorded in the March quarter. At the time of afternoon trading, IOB shares were trading 4.11 percent higher on the BSE, reaching the mark of 35.2 rupees.