Prabhudas Lilladher is bullish on South Indian Bank has recommended buy rating on the stock with a target price of Rs 18 in its research report dated July 26, 2019.
Prabhudas Lilladher's research report on South Indian Bank
SIB's earnings were marginally below expectations with PAT at Rs733mn (PLe: Rs890mn) as operating performance is improving only gradually. Provisions came in lower as slippages of Rs2.41bn was lower sequentially which helped stable asset quality but marginally lift PCR to 32.3% (45.1% incl. technical w.off). Bank is closely monitoring some of the dispensation related loans restructured during Kerala floods but does not see large risks from same. Structurally PCR remains lowest in peer group which has to be stepped up, which should be helped by improving operations.
We maintain BUY with TP of Rs18 (unchanged) based on 0.8x Mar-21 ABV.
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