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Anand Rathi Securities maintains buy on South Indian Bank, target price Rs 16

The brokerage expects the credit costs of the bank to normalize on account of asset quality stablisation and lower slippages.

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Last Updated: Jan 21, 2020, 08.39 AM IST
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Anand Rathi Securities has maintained its buy rating on South Indian Bank in the long term with a target price of Rs 16. The stock closed at Rs 11.1, up 1.3% on Monday while the BSE Sensex closed 416.46 points (0.99%) down at 41,528.91.

Company Financials

For the quarter ended 31-12-2019, the company has reported a standalone interest income of Rs 1556.82 crore, up .42 % from last quarter interest income of Rs 1550.31 crore and up 14.03 % from last year same quarter Interest Income of Rs 1365.33 crore. The bank has reported net profit after tax of Rs 90.54 crore in the latest quarter.

Investment Rationale


The brokerage expects the net interest margins of the bank to remain flat in the near term given the bank’s inclination to the secured retail and SME portfolios. However, the brokerage expects the credit costs of the bank to normalize on account of asset quality stablisation and lower slippages. Lumpy delinquencies from the corporate book are however negatives to look out for in the stock.

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