🧾 At a Glance
Once known as the Catholic Syrian Bank, CSB Bank has turned its nearly 100-year-old heritage into a nimble, modern avatar that thrives on gold loans, NRI deposits, and Kerala’s undying love for banking. But is it punching above its weight—or just over-reporting “other income”? Let’s find out.
1. 👋 Intro with Hook
Imagine being 100 years old, but still a “microcap” in the world of banks. That’s CSB Bank for you—a bank so old it might’ve financed Vasco da Gama’s ship, but still fighting for visibility on NSE. It’s the kind of bank that tops Kerala’s Google searches but is missing from Delhi’s lunchroom investor talk.
But here’s what caught our eye:
- Net profit up 5% YoY in FY25
- Advances up 32%, deposits up 20% in Q1FY26
- A juicy gold loan book
- ROE of 14.3%, P/E of just 12.1x
So… hidden gem or just gold-plated?
2. 🧳 Business Model – WTF Do They Even Do?
CSB’s product mix (FY24):
- 🏦 Retail Banking (59%): CASA, term deposits, gold loans, personal loans, forex, credit cards.
- 🏢 Wholesale Banking (23%): Corporate loans, securitization, supply chain lending.
- 💰 Treasury (14%): G-Secs, forex, trading, liquidity management.
- 👨💼 SME Banking (4%): Emerging biz and MSME lending.
Translation?
Half its balance sheet is wrapped in gold (literally), while the rest tries to behave like a traditional bank.
3. 📊 Financials Overview
| Metric | FY23 | FY24 | FY25 |
|---|---|---|---|
| Revenue | ₹2,320 Cr | ₹2,928 Cr | ₹3,597 Cr |
| Net Profit | ₹547 Cr | ₹567 Cr | ₹594 Cr |
| ROE | 19% | 16% | 14% |
| Gross NPA | 1.26% | 1.47% | 1.57% |
| Net NPA | 0.35% | 0.51% | 0.52% |
Highlights:
- Profit up 9% CAGR over 3 years
- Revenue up 21% CAGR
- OPM holding strong at 54%+
- Credit cost still under control
- No dividends yet — pure reinvestment mode
But… financing profit dipped sharply in FY25 due to exploding interest costs (₹2,121 Cr from ₹1,451 Cr in FY24).
4. 💸 Valuation – Cheap, Meh, or Crack?
- P/E: 12.1x (vs HDFC Bank’s 21.7x)
- P/B: 1.59x (decent for a mid-sized bank)
- Market Cap: ₹7,160 Cr
- FV Range (Edu-estimate): ₹375–₹465 (based on 12–15x normalized EPS of ₹30–₹34)
So it’s not crack, but definitely cheaper than most of its better-known peers.
5. 🍿 What’s Cooking – Recent Buzz
- 🔁 CEO Reappointed: Pralay Mondal gets a fresh 3-year term (good continuity)
- 📈 Q1FY26 Update:
- Deposits: ₹35,990 Cr (+20% YoY)
- Advances: ₹33,142 Cr (+32% YoY)
- 🧾 Other Income (FY25): ₹972 Cr – suspiciously high, and driving bulk of bottom-line growth
EduRed Flag™: When “Other Income” is more reliable than interest spread… something’s off.
6. 📉 Balance Sheet – How Much Debt, How Many Dreams?
- Deposits: ₹36,861 Cr (up 25% YoY)
- Borrowings: ₹5,546 Cr (up 215% YoY 🤯)
- Equity + Reserves: ₹4,498 Cr
- CRAR: ~26% (very healthy)
- Loan book: ~₹33K Cr, gold loans dominant
Not bankrupt, but borrowing sharply to maintain growth. Dangerous?
7. 💵 Cash Flow – Sab Number Game Hai
| Year | CFO (₹ Cr) | FCF (₹ Cr) |
|---|---|---|
| FY23 | ₹2,211 | Positive |
| FY24 | ₹1,783 | Positive |
| FY25 | -₹5,256 | 👀 What!? |
That FY25 cash flow figure is ugly. Need more context from concalls.
8. 📐 Ratios – Sexy or Stressy?
| Ratio | FY24 | FY25 |
|---|---|---|
| ROE | 16% | 14% |
| ROA | 1.59% | 1.42% |
| CASA Ratio | ~30% | ~32% |
| Gross NPA | 1.47% | 1.57% |
| Net NPA | 0.51% | 0.52% |
| Credit/Deposit Ratio | ~90% | ~90% |
ROA still >1% ✅
NPAs stable ✅
CASA could improve 👎
9. 📊 P&L Breakdown – Show Me the Money
- Revenue: ₹3,597 Cr in FY25
- Of which ₹2,121 Cr = interest income
- ₹972 Cr = other income (hmm…)
- PAT: ₹594 Cr
- EPS: ₹34.23
Margins slimmed due to rising interest expenses, but EPS held up due to… yep… “Other Income”.
10. ⚔️ Peer Comparison – Who Else in the Game?
| Bank | P/E | ROE | GNPA | Market Cap |
|---|---|---|---|---|
| HDFC Bank | 21.7x | 14.5% | 1.2% | ₹15.4L Cr |
| ICICI Bank | 19.9x | 17.9% | 2.0% | ₹10.1L Cr |
| Axis Bank | 12.9x | 16.3% | 2.0% | ₹3.6L Cr |
| CSB Bank | 12.1x | 14.3% | 1.57% | ₹7,160 Cr |
Verdict: Cheap valuation, but still too small to be taken seriously by big institutions… yet.
11. 🧪 Misc – Shareholding & Promoters
- Promoters: 40% (down from 49.72%)
- FIIs: 13.07% (up big from 5%)
- DIIs: 16.89%
- Retail Public: 27.65%
Interesting: FII interest is growing even as promoter stake is down.
Management stability (CEO reappointed) and strong institutional backing are green flags.
12. 🧑⚖️ EduInvesting Verdict™
CSB Bank is like that smart, quiet kid from Kerala who cracks every exam, but doesn’t show up to the party.
✅ Strong growth in retail and gold loan segments
✅ Clean balance sheet
✅ Reasonable valuation
✅ Improving institutional interest
❌ High dependency on other income
❌ Shrinking financing margin
❌ Still no dividend (and it’s been years)
It’s not a showstopper, but definitely deserves a slow clap. If they clean up the “other income” dependency and build margin muscle, CSB could graduate from “microcap monk” to “midcap maverick”.
🎯 FV Range: ₹375–₹465
(Based on 12–15x FY25E EPS of ₹30–₹34)
✍️ Written by Prashant | 📅 10 July 2025
Tags: CSB Bank, Gold Loan Stocks, Kerala Banks, Smallcap Banking, Indian Private Sector Bank, EduInvesting Bank Series, Financials, SME Lending, PSU vs Private Bank, Microcap Banks
