Bank Stock Declares 23% Surge In Q2 Net, Buy With TP Of Rs 31: ICICI Securities

South Indian Bank (SIB) announced a surge of 23.3% in its net profit for Q2 of the financial year 2023-24 to Rs 275 crore as against Rs 223 crore announced in the corresponding quarter of last financial year amid improvement in credit quality.

ICICI Direct has recommended buy call with target price of Rs 31 apiece. South Indian Bank shares soared 153% in last 2-years. Current market price of South Indian Bank share on BSE as on October 27, 2023 is Rs 24.26 per share. If you buy South Indian Bank share at this price, you can fetch likely return of 27.78%. Check details below:

South Indian Bank Q2: The bank announced its gross non-performing assets reduced by 71 basis points (bps) from 5.67% to 4.96% on year-on-year basis. South Indian Bank's NNPA declined as well by 81 bps from 2.51% to 1.70% on year-on-year basis. "One major factor is significant improvement in credit quality in the overall book. Net interest margin, portfolio quality and customer addition all remained strongly positive during the quarter," stated P R Seshadri, managing director and chief executive officer of South Indian Bank.

South Indian Bank Stock Outlook & Return: Last trading price of South Indian Bank stock on BSE is Rs 24.26 per share. Its 52-week high price is Rs 27.59 per share and 52-week low price is Rs 12.91 per share, respectively. The company's market capitalisation is Rs 5076.99 crore.

South Indian Bank shares fell 6.80% in last 1-week, gained 54% in last 6-months, soared 74% in last 1-year, surged 153% in last 2-years, gave shareholders attractive return of 263% in last 3-years.

ICICI Securities On South Indian Bank: According to the analyst in its brokerage report dated Oct 22, "We raise our TP to INR 31 (vs. INR 28), valuing the stock at ~0.9x FY25E ABV. While the bank has delivered ~1% RoA in Q2FY24, we highlight a part of it was due to muted credit costs (negative net slippages), stable NIM and reversals of FLDG provisions. We estimate some pressure on NIM in the near term, but will likely see stability YoY for FY25E aided by favourable loan mix and favourable LDR."

South Indian Bank About: One of the earliest banks in South India, "South Indian Bank" came into being during the Swadeshi movement. The establishment of the bank was the fulfillment of the dreams of a group of enterprising men who joined together at Thrissur, a major town (now known as the Cultural Capital of Kerala), in the erstwhile State of Cochin to provide for the people a safe, efficient and service oriented repository of savings of the community on one hand and to free the business community from the clutches of greedy money lenders on the other by providing need based credit at reasonable rates of interest, according to its official website.

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