CSB posts stellar earnings; will the stock get rerated further?
Given the strong parentage of the Fairfax group, more than adequate capital, relatively better asset quality and high provisioning, we see CSB Bank continuing to grow its loan book at a healthy pace and and improve its return ratios in the medium term
May 12, 2021 / 10:14 AM IST
PRO Only Highlights
Quarterly performance largely backed by improved realisations
Medium-term triggers China plus and protectionist measures for tyre industry
Valuations not inexpensive; but improved medium-term outlook
Our main premise about CSB Bank CMP: Rs 274; Market Cap: Rs 4,747 crore) as a good turnaround story has played out, as is apparent in its FY21 earnings.
CSB Bank, formerly Catholic Syrian Bank, posted solid earnings, with its net profit rising to Rs 213 crore in FY21, compared to Rs 13 crore in FY20. This surge comes despite the bank improving the provision coverage ratio, creating a buffer through accelerated provisioning, adding 101 branches and having one-off employee-related...