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INTERNATIONAL JOURNAL OF EDUCATION, MODERN MANAGEMENT, APPLIED SCIENCE & SOCIAL SCIENCE (IJEMMASSS) [ Vol. 8 | No. 3 (I) | July-September, 2026 ]

Financial Performance and Stock Price Behaviour of Indian Overseas Bank at Indian Overseas Bank

K.T. Lathika Sree & Dr. G. Amutha

This paper examines whether the financial performance of Indian Overseas Bank, a public sector bank headquartered in Chennai, is reflected in the behaviour of its stock price over five years, from FY2020-21 to FY2024-25. Indian Overseas Bank provides a useful case because it spent many years under the Reserve Bank of India's Prompt Corrective Action framework before entering a phase of steady recovery. This situation naturally raises the question of whether an improvement in fundamentals actually shows up in how the market values the stock. The study uses an analytical, quantitative research design and relies entirely on secondary data gathered from Indian Overseas Bank's published annual reports, Reserve Bank of India publications, and established financial data platforms. Six indicators of performance were tested against Indian Overseas Bank's year-end closing stock price: Earnings Per Share, Return on Equity, Return on Assets, the Gross Non-Performing Assets ratio, Net Interest Margin, and Net Profit Margin. The analysis employed Karl Pearson's coefficient of correlation and simple linear regression to evaluate the strength, direction, and explanatory power of each indicator. All profitability and efficiency measures showed a positive association with the stock price, while the Gross Non-Performing Assets ratio, as expected by theory, showed a negative association. The Gross Non-Performing Assets ratio had the strongest relationship, with a correlation coefficient of -0.784 and an R-square of 0.614. Net Interest Margin and Return on Equity followed closely, while Net Profit Margin showed the weakest link. Overall, the findings indicate that the stock price of Indian Overseas Bank is largely, but not entirely, explained by its financial performance. The market appeared to give particular weight to the bank's improving asset quality during this period.

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