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Moneycontrol

Budget 2021

Associate Partners:

  • SMCSamsungVolvo
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Buy South Indian Bank; target of Rs 11: Prabhudas Lilladher

Prabhudas Lilladher is bullish on South Indian Bank has recommended buy rating on the stock with a target price of Rs 11 in its research report dated June 28, 2020.

June 30, 2020 / 10:54 AM IST
 
 
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Prabhudas Lilladher's research report on South Indian Bank


Despite decent NII growth of 19% YoY, higher provisioning on account of COVID-19, MTM requirements on certain SR exposure and PCR enhancement to 34.1% (up 315bps YoY and 225bps QoQ) to maintain asset quality, adversely impacted profits leading to a loss of Rs 1.4bn. The bank has a strong Retail/MSME loan book also supported by a growing Gold Loan book, improving operations and has raised Rs5bn of capital (AT-1 bonds) but higher provisions for PCR enhancement as well as COVID impact will keep earnings growth restricted, plus we remain watchful of Asset Quality.



Outlook


We retain BUY maintaining TP of Rs11 based on 0.5x Mar-22 ABV as valuations remain undemanding.





For all recommendations report, click here


Disclaimer: The views and investment tips expressed by investment experts/broking houses/rating agencies on moneycontrol.com are their own, and not that of the website or its management. Moneycontrol.com advises users to check with certified experts before taking any investment decisions.

Broker Research
first published: Jun 30, 2020 10:54 am

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