The South Indian Bank Limited – comprehensive Stock Analysis Report

South Indian Bank Equity Report.pdf

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South Indian Bank (SIB) is a mid-sized private sector bank that has undergone a clear turnaround after a challenging phase between 2020–2022. The bank has restored profitability, with net profit rising sharply to ₹1,303 crore in FY2025, supported by lower credit costs, tighter risk management, and improving asset quality. Gross NPAs have declined to below 3%, and net NPAs are now well under 1%, marking one of the strongest balance sheet positions in its recent history.

Strategically, SIB is shifting toward retail and MSME lending, reducing dependence on volatile corporate loans. This granular lending approach, combined with a strong regional franchise in South India, is improving earnings stability. While interest income remains the primary revenue driver, gradual expansion in fee income and better loan mix are enhancing return ratios.

From a financial perspective, the bank is well capitalised with a capital adequacy ratio of ~19.9%, providing a strong buffer for growth and stress. Valuations remain modest, with the stock trading around book value and at a low earnings multiple compared to peers, reflecting both past concerns and ongoing execution risks. Overall, SIB represents a stabilising, recovery-led banking franchise operating in a structurally growing but highly competitive Indian banking environment.