Indian Bank, Bank of Maharashtra, Union Bank: Nifty PSU Bank index jumps over 4% on hopes of strong Q1 show

NSE data showed that the Nifty PSU Bank index surged 4.3% to 8,561.20 points on Friday’s market session, compared to 8,203.20 points at the previous stock market close. The index witnessed significant support after Indian Bank and Bank of Maharashtra's Q1 results for the financial year ending 2026-27.

At 2:30 pm, the Nifty PSU Bank index was trading 3% higher at 8,449.35 points, according to the exchange data.

Key focus of the investors was on the improving asset quality of the companies which have announced their results on July 10, and on the potential for healthy upcoming financial results of the remaining State-owned banking companies for the April to June quarter earnings for the current fiscal.

Healthy performance from Indian Bank?

In its Q1 results, Indian Bank posted a 10% increase in net profits to ₹3,273 crore, compared year-on-year (YoY) with ₹2,973 crore in the same period a year earlier, according to the NSE filings.

The PSU bank’s data showed that the increase in net profits was due to a rise in core interest income, lower provisions for bad loans and improvement in asset quality during the June quarter.

According to the exchange filings, Indian Bank’s interest income, which shows the difference between interest earned from lending operations and the interest paid on deposits, expanded 17% to ₹7,435 crore, from ₹6,359 crore a year earlier.

Data also showed that the PSU lender’s provisions for bad loans dropped to ₹376 crore in the June quarter, from ₹748 crore sequentially, and down compared year-on-year with ₹387 crore in the same quarter of the previous fiscal year.

Banks are likely to reduce their provisioning for bad loans when they expect lower non-performing assets (NPAs) or bad loans in the upcoming period, which is a positive move for institutional lenders.

With the falling provisions, Indian Bank recorded an improvement in asset quality with gross NPAs dropping to 1.86% in Q1, from 3.01% in the same period last year.

Did Bank of Maharashtra’s asset quality remain flat?

Although Bank of Maharashtra posted a healthy jump in Q1 net profits, the PSU bank’s asset quality remained flat on a sequential basis, according to the standalone financial statements released on July 10.

However, on a YoY basis, Bank of Maharashtra’s gross NPAs declined by 29 basis points to 1.45% in the June quarter, compared to 1.74% in the same period the previous financial year, as per the exchange filings.

The lender recorded a 27% jump in net profit to ₹2,020 crore in the quarter ended June 30, 2026, compared year-on-year (YoY) with ₹1,593 crore in the same quarter of the previous financial year.

The PSU bank’s net interest income (NII) advanced 14.5% to ₹3,770 crore in the first quarter of the financial year ending 2026-27, compared YoY with ₹3,117 crore in the year-ago period.

Investors’ sentiment was also aided due to a positive start to the Q1 earnings season this week, amid the global market uncertainty, elevated oil prices, and escalations between the United States and Iran in West Asia.

PSU Bank stocks in focus today

*Note: All data related to the current market price, intraday returns, 5-day returns, and YTD returns have been collected from the NSE website.