IOB Q2 FY27: Consol PAT +56% YoY to ₹1,963 Cr on margin expansion; CRAR dips on RBI flag

Indian Overseas Bank's consolidated net profit for Q2 FY27 rose 55.9% YoY to ₹1,962.67 Cr (from ₹1,258.82 Cr in Q2 FY26) and 14.4% QoQ (from ₹1,716.29 Cr in Q1 FY27), comfortably clearing our pre-result preview's expected ₹1,600–1,700 Cr band and beating the implied Street bar — notable given analyst ratings on the stock skewed SELL (2 strong sell, 3 sell, 2 hold, 0 buy per our preview) on valuation grounds rather than earnings doubts. Net interest income (interest earned less interest expended) came in at ₹3,866.98 Cr, above the preview's ₹3,700–3,800 Cr expectation. NPM expanded to 18.82% from 15.69% QoQ and 13.66% YoY, and OPM to 28.93% from 24.62% QoQ and 26.06% YoY — both YoY and sequential expansion, consistent with a genuine margin story rather than a one-quarter blip.

The margin bridge is mixed on the income side but clean on costs. Interest earned (revenue) grew 17.2% YoY and 4.83% QoQ to ₹9,201.23 Cr, but other income fell to ₹1,226.65 Cr — down 43.2% sequentially from an elevated ₹2,160.23 Cr in Q1 and down 10.2% YoY — leaving total income actually 4.66% lower QoQ at ₹10,427.88 Cr. Profit still rose sequentially because total expenditure (excluding provisions) fell 10.1% QoQ to ₹7,411.39 Cr, driven mainly by employee costs nearly halving to ₹883.96 Cr from ₹2,104.45 Cr in Q1 — likely reflecting a high wage/pension-provision base in the June quarter rather than a new cost baseline, though the filing's notes don't spell this out explicitly. Provisions & contingencies rose to ₹950.08 Cr from ₹834.03 Cr QoQ.

The stock went into the print at ₹29.84, down 7.1% over the past month of trading.

For context: this is the second-highest quarterly PAT of the last 6 quarters; PAT has now risen for 5 consecutive quarters.

EPS (consolidated) ₹1.02 vs ₹0.89 QoQ vs ₹0.65 YoY

On guidance, management's FY27 credit-growth floor of 13–14% is being beaten (22.75% YoY per the bank's own Q1 run-rate disclosure, not separately re-stated this quarter), and NIM has tracked inside the guided 3.3–3.4% band. Capital adequacy is the one area where the quarter cuts against the prior confident framing: standalone CRAR slipped to 18.60% (CET1 16.26%) from 19.36% in Q1, and this comes days after the bank disclosed (Oct 24) that an RBI inspection flagged RWA discrepancies impacting CRAR — a direct, numbered link between a disclosed regulatory finding and the capital ratio move. That lands alongside SEBI's Oct 20 nod for a 10 Cr-share ESPS issuance, which is the equity-raise route management had flagged as comfortable off the (higher) 19.36% base. Standalone gross NPA improved to 1.19% from 1.83% YoY and 1.33% QoQ, squarely inside the preview's 1.1–1.3% expected band — asset quality is not the concern here. No separate management press release was available in our records to cross-check against the filing's own framing.