Check Before You Invest : The South Indian Bank Ltd

BSE: 532218 NSE: SOUTHBANK ISIN: INE683A01023

| Sector: BFSI | Industry: Bank - Private

Snapshot

Q.1 Which industry/sub-sector does The South Indian Bank Ltd belong to?

The South Indian Bank Ltd belongs to the BFSI sector, operating specifically within the Bank - Private segment.

Q.2 Is The South Indian Bank Ltd a good quality company?

The South Indian Bank Ltd is a weak quality company, based on a inconsistent 10-year financial track record.

Q.3 Is The South Indian Bank Ltd undervalued or overvalued?

The South Indian Bank Ltd appears Overvalued, as its key valuation ratios are above with their past averages.

Q.4 Is The South Indian Bank Ltd a good buy now?

The South Indian Bank Ltd is a neutral opportunity now, based on stable price trend analysis suggesting prices may move sideways. However, you need to check its quality and valuation before making a decision

Performance Analysis

Q.1 Total Income growth of The South Indian Bank Ltd?

The South Indian Bank Ltd Total Income growth is 10.85% for FY-2025, which is above its 5-year CAGR of 4.97%, indicating faster growth.

Q.2 Return on Assets of The South Indian Bank Ltd?

The South Indian Bank Ltd Return on Asset is 1.1%, which is above its 5-year historical median of 0.8%, indicating improved earnings on assets.

	Current Level	5-year Historic Median
NIM%	2.91	2.91
PPOP%	21.5	13.68
RoA%	1.1	0.8

Q.3 Return on Equity (ROE) of The South Indian Bank Ltd?

The South Indian Bank Ltd Return on Equity is 13.8% for FY-2025, which is above its 5-year historical median of 12.4%, indicating the business is making better use of its shareholders capital.

Q.4 Pre-provisioning operating profit margin of The South Indian Bank Ltd?

The South Indian Bank Ltd Pre-provisioning operating profit margin, which is the bank’s core operating profit before provisioning for bad loans, is 21.5% for FY-2025, which is above its 5-year median(13.68%), indicating increasing margins.

Q.5 Net Interest Margin of The South Indian Bank Ltd?

The South Indian Bank Ltd Net Interest Margin, which is the difference between the rate of interest earned on assets and the rate of interest paid on liabilities, is 2.91% for FY-2025, which is in line with its 5-year median( 2.91%), indicating stable margins.

Q.6 Total Asset growth of The South Indian Bank Ltd?

The South Indian Bank Ltd Total Asset growth is 6.17% for FY-2025, which is above its 5-year CAGR of 5.14%, indicating faster growth.

Q.7 Cost to Income ratio of The South Indian Bank Ltd?

The South Indian Bank Ltd Cost to Income ratio which represents the cost incurred for every Rs.100 earned is 57.2% for FY-2025, is lower its historical 5-year median of 60.6%, indicating deteriorated cost management.

Q.8 Capital Adequacy ratio of The South Indian Bank Ltd?

The South Indian Bank Ltd Capital Adequacy ratio (CAR) is 19.3% for FY-2025, which is above the regulatory requirement of 12%, indicating strong capital position.

Q.9 Asset Quality of The South Indian Bank Ltd?

The South Indian Bank Ltd Gross Non-Performing Assets, which are loans overdue by more than 90 days, is 3.2% for FY-2025, which is below its 5-year median 5.14%, while Net Non-Performing Assets, which is GNPA minus provisions made for bad loans is 0.92% which is below its 5-year median( 1.86%), indicating improving asset quality.

Ownership & governance

Q.1 Promoter shareholding and pledge status of The South Indian Bank Ltd?

Promoters hold 0.00% of the The South Indian Bank Ltd, with 0.00% of their stake pledged, indicating no pledge risk.

Peer comparison (industry-wise, mcap)

Q.1 AUM Growth of The South Indian Bank Ltd vs Industry Peers?

The South Indian Bank Ltd AUM CAGR is 5.14%, compared to the 5-year industry median CAGR of 12.74%, indicating slower growth and losing its market share.

Q.2 Profit metrics (NIM, PPOP, RoA) of The South Indian Bank Ltd vs industry peers

The South Indian Bank Ltd profit metrics are in line with the industry median level of 7.71%, indicating similar profitability compared to peers.

Profit Metrics

	Current Level	5-year Industry Median
NIM%	2.91	3.71
PPOP%	21.5	18.38
RoA%	1.1	1.05

Q.3 Operating efficiency of The South Indian Bank Ltd vs industry peers?

The South Indian Bank Ltd Cost to Income (55.75) is below the industry median of (61.45); while the current ROE (12.4) are above than the 5-year average Industry ROE (12.3). This shows that the business is positioned in the middle quartile of the industry.

Operating Efficiency

	Current Level	5-year Industry Median
NIM%	2.91	3.71
PPOP%	21.5	18.38
RoA%	1.1	1.05
Cost to Income%	57.2	61.45
ROE%	13.8	12.3

Valuation & price assessment

Q.1 Stock return of The South Indian Bank Ltd over the last decade?

Over the last 9 years, the stock has delivered a CAGR of 10.7% based on the current price.

Q.2 What return has the stock given over the last decade?

	9Y	5Y	3Y	1Y
Share Price CAGR	10.7%	40.3%	39.9%	60.6%

Q.3 How do the current valuation ratios compare with 5-year historical median and industry numbers?

Valuation Ratios	Current	5-year Historic Median	5-year Industry Median
Price to Earnings	7.74	6.11	13.38
Price to Book	0.98	0.66	1.37
Price to Sales	1.11	0.65	1.77
EV to EBITDA	4.02	2.63	7.70

Q.4 Valuation ratios of The South Indian Bank Ltdvs historical and industry averages?

The current Price to book ratio (P/B) 0.98% is higher than its historical median of 0.66%, indicating that at the current price the stock is overvalued. However, you need a deeper analysis to make a better judgement.

Strategic outlook

Q.1 Does its ROIC exceed its WACC?

The South Indian Bank Ltd return on invested capital (ROIC) is 40.17% for FY-2025, is higher than its estimated weighted average cost of capital (WACC) of 13.5%, indicating value creation.

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