South Indian Bank Q1 Review - Decent Quarter, Earnings To Gradually Improve; Retaining A Buy: Anand Rathi

Anand Rathi Report

Higher non-interest income and lower opex counter-balanced South Indian Bank Ltd.’s lower net interest margin, leading to a ~17% QoQ increase in operating profits.

Despite a seasonally weak quarter, headline asset quality was stable. With stress from the legacy book recognised, the focus now shifts to profitability.

We expect South Indian Bank to deliver a sustainable 1% RoA in the medium term.

We retain our Buy rating, with a 12-month target price of Rs 37, valuing the stock at 0.9 times price/adjusted book value on the FY26E book.

Risks: Higher stress arising from the corporate book; less-than-expected loan growth.

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