1. At a Glance
South Indian Bank (SIB) — Kerala’s original private banking grandpa (est. 1929) — has been in the game longer than most NSE-listed companies have existed. It’s clocking a P/E of just ~5.7, with FY25 PAT of ₹1,303 Cr (+21% YoY) and GNPA at 3.15%, the lowest in years. With a market cap of ₹7,640 Cr, it’s trading at just 0.73× book value — practically begging value investors to at least swipe right. Dividend yield? 1.37%, because they’d rather hoard capital than splurge.
2. Introduction
Once written off as a sleepy regional lender drowning in bad loans, SIB has quietly cleaned up its act over the last 3 years. GNPA fell from 5.87% in mid-2022 to just 3.15% now, NNPA to 0.68%. Profit CAGR over 5 years? A spicy 65.7% — faster than many mid-cap banks.
Yet, the market still treats it like the kid at the back of the class who once failed math. At under 0.75× book value, it’s priced like a struggling PSU bank, not a private lender with improving asset quality and rising ROE.
3. Business Model (WTF Do They Even Do?)
- Core: Retail & corporate banking, treasury, forex, and para-banking.
- Geography: Strong in Kerala, decent South India footprint, expanding into metros.
- Product Mix: Loans, deposits, credit cards, third-party product distribution.
- CASA Ratio: 31.9% — not HDFC-level, but better than many peers.
Think of it as a regional bank trying to cosplay as a national player — with mixed but improving results.
4. Financials Overview
Fresh P/E = ₹29.2 ÷ ₹5.09 EPS ≈ 5.73×.
FY25 Snapshot:
- Revenue: ₹9,413 Cr → TTM ₹9,461 Cr (+6% YoY)
- Net Profit: ₹1,303 Cr → TTM ₹1,331 Cr
- NIM: 3.28%
- ROE: 13.8%
- GNPA/NNPA: 3.15% / 0.68%
Commentary: Net profit has tripled in 3 years, but revenue growth is crawling. Other income (₹2,053 Cr) is a big driver.
5. Valuation
Method 1 – P/E:
Sector average ~12–15×.
FV = ₹5.09 EPS × 12–15× = ₹61 – ₹76.
Method 2 – P/BV:
BV = ₹39.8, sector average P/B ~1.2–1.5×.
FV = ₹48 – ₹60.
Method 3 – DCF (Quick):
Assume
