Will you escape? South Indian Bank shares on the other hand | 52-week high, stuns investors


Will you escape? South Indian Bank shares on the other hand | 52-week high, stuns investors, Will the leader finally emerge? South Indian Bank, which has remained silent for so long (NSE: SOUTHBANK) Stocks are soaring on a good morning; Investors, on the other hand, are disgusted by this.

You heard right, South Indian Bank shares are on the upswing. SIB shares gained over 9 percent on the National Stock Exchange on Tuesday.

South Indian Bank, which has been trading at Rs 7-8 for the entire current year, currently stands at Rs 17.75. SIB managed to add Rs 1.50 to its share price on Tuesday alone. A look at the last five trading days shows a 20 percent rise. The bank’s share price was Rs 14 last week.

A strong September quarter results lay the foundation for a rally in South Indian Bank shares. The bank had managed to earn a net profit of Rs 223.10 crore during the July-September period. South Indian Bank recorded a loss of Rs 187.06 crore in the same period last year. Bad loans at least improved SIB’s balance sheet last quarter.

The second quarter saw a 10.6 percent growth in revenue. South Indian Bank’s net income rose to Rs 1,995.24 crore from Rs 1,803.76 crore. Interest income increased from Rs 1,646.59 crore to Rs 1,740.14 crore. Also, non-performing assets improved to 5.67 percent, improving the bank’s asset quality.

Since the appointment of a new managing director in September 2020, South Indian Bank’s focus has been on building its balance sheet with a focus on net interest income and asset quality. As a result, the bank was able to reduce its loan book by 50 percent after 2020.

According to the October report released by ICICI Securities, the performance of South Indian Bank is now at par with the industry standard.

Will you escape?  South Indian Bank shares on the other hand;  52 weeks high

Stock experts describe South Indian Bank as a baby bank stock suitable for long-term investors. South Indian Bank, which has a market capitalization of Rs 1,800 crore, receives huge deposits from non-resident Indians.

Although its roots are in South India, SIB has 26 per cent of its business outside the South Indian states. Most recently, South Indian Bank’s mobile banking business has grown by over 1,000 percent.

Market experts estimate that the share price of South Indian Bank may go up to Rs 25 in the next one year.

At the same time, a couple of things need to be mentioned regarding the stock. South Indian Bank does not regularly pay dividends to investors despite consistently making profits.

Investors should also weigh in on the low interest coverage ratio, low return on equity (1.25% over 3 years) and liabilities of Rs 35,479 crore. South Indian Bank shares have seen a high of Rs 17.75 and a low of Rs 7.25 in the last 52 weeks.

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