Penny stock rise 630% in 4 yrs: Nirmal Bang sees more upside potential in this multibagger
South Indian Bank shares have surged 630% in four years, but Nirmal Bang believes the rally isn't over. Here's why the brokerage remains bullish on the stock.
- Jul 7, 2026,
- Updated Jul 7, 2026 10:20 AM IST
Domestic brokerage firm Nirmal Bang Institutional Equities has initiated coverage on South Indian Bank Ltd. South Indian Bank is nearing what Nirmal Bang Institutional Equities described as an important inflection point in its multi-year transformation, after spending nearly a decade repairing its balance sheet following the corporate asset-quality cycle.
According to Nirmal Bang, the bank has largely completed the heavy lifting and is moving into the next phase of scaling growth from a stronger position, with the franchise now built on tighter underwriting standards, lower concentration risk, improved operating capabilities, and a more granular retail and MSME-led mix.
Shares of South Indian Bank settled at Rs 46.84 on Monday and soared 6.5 per cent on Tuesday to hit its fresh 52-week high at Rs 49.90, commanding a total market capitalization of more than Rs 12,600 crore. The stock is up 77 per cent from its 52-week low at Rs 28.13 in September 2025.
Shares of South Indian Bank have gained 15 per cent in the last 6 months, while It has soared nearly 30 per cent in 2026 so far. The stock is up 60 per cent in the last one year, while it has soared more than 325 per cent in the last five years. The stock has soared 990 per cent from its Covid-19 lows of Rs 4.57 and has zoomed nearly 630 per cent in four year from Rs 6.8 levels in July 2022.
Nirmal Bang said the bank’s earnings profile is shifting from turnaround-led profitability to more sustainable returns. It expects South Indian Bank to deliver about 1.2 per cent return on assets through the cycle, supported by credit costs of about 50 basis points, gradual net interest margin recovery to above 3 per cent, loan growth of around 15 per cent, improving fee income, and positive operating jaws.
The report said asset quality has improved structurally after several years of clean-up and de-risking. Gross NPA has fallen from more than 8 per cent at its peak to 1.4 per cent, while credit costs have dropped from over 250 basis points during the stress cycle to around 40-45 basis points.
Nirmal Bang said that with legacy stress largely behind it, the bank’s management can now focus more on growth than balance sheet repair. It also noted that return on assets has recovered from near zero in FY20-FY22 to around 1.1 per cent in FY26. It said improving CASA and disciplined pricing should also support margin expansion.
The report added that retail and MSME are expected to become the key growth engines, with management targeting 15-20 per cent growth in these segments, while corporate banking is being repositioned towards deeper relationships, stronger wallet share, and selective focus on higher-yielding mid-corporates.
It expects net interest margins to move sustainably above 3 per cent as 60-65 per cent of deposits are repriced and the loan mix shifts further towards higher-yielding retail and MSME segments. It said these changes have already resulted in sustained positive operating jaws, with revenue growth expected to continue outpacing operating expense growth as the transformed franchise scales up.
Nirmal Bang also said South Indian Bank has improved operating efficiency over the past two years through cost discipline, better use of existing infrastructure, investments in technology, digital journeys, process automation, and organisational capabilities. Nirmal Bang has initiated with a 'buy' coverage on the stock with a target price of Rs 62 on it.
Among other brokerage firm, ICICIDirect had a 'buy' rating on the stock with a target price of Rs 52, while Anand Rathi Share & Stock Brokers Ltd also gave it the same rating with a target price of Rs 59. ICICI Securities also has 'buy' on South Indian Bank with a target price of Rs 56.
Domestic brokerage firm Nirmal Bang Institutional Equities has initiated coverage on South Indian Bank Ltd. South Indian Bank is nearing what Nirmal Bang Institutional Equities described as an important inflection point in its multi-year transformation, after spending nearly a decade repairing its balance sheet following the corporate asset-quality cycle.
According to Nirmal Bang, the bank has largely completed the heavy lifting and is moving into the next phase of scaling growth from a stronger position, with the franchise now built on tighter underwriting standards, lower concentration risk, improved operating capabilities, and a more granular retail and MSME-led mix.
Shares of South Indian Bank settled at Rs 46.84 on Monday and soared 6.5 per cent on Tuesday to hit its fresh 52-week high at Rs 49.90, commanding a total market capitalization of more than Rs 12,600 crore. The stock is up 77 per cent from its 52-week low at Rs 28.13 in September 2025.
Shares of South Indian Bank have gained 15 per cent in the last 6 months, while It has soared nearly 30 per cent in 2026 so far. The stock is up 60 per cent in the last one year, while it has soared more than 325 per cent in the last five years. The stock has soared 990 per cent from its Covid-19 lows of Rs 4.57 and has zoomed nearly 630 per cent in four year from Rs 6.8 levels in July 2022.
Nirmal Bang said the bank’s earnings profile is shifting from turnaround-led profitability to more sustainable returns. It expects South Indian Bank to deliver about 1.2 per cent return on assets through the cycle, supported by credit costs of about 50 basis points, gradual net interest margin recovery to above 3 per cent, loan growth of around 15 per cent, improving fee income, and positive operating jaws.
The report said asset quality has improved structurally after several years of clean-up and de-risking. Gross NPA has fallen from more than 8 per cent at its peak to 1.4 per cent, while credit costs have dropped from over 250 basis points during the stress cycle to around 40-45 basis points.
Nirmal Bang said that with legacy stress largely behind it, the bank’s management can now focus more on growth than balance sheet repair. It also noted that return on assets has recovered from near zero in FY20-FY22 to around 1.1 per cent in FY26. It said improving CASA and disciplined pricing should also support margin expansion.
The report added that retail and MSME are expected to become the key growth engines, with management targeting 15-20 per cent growth in these segments, while corporate banking is being repositioned towards deeper relationships, stronger wallet share, and selective focus on higher-yielding mid-corporates.
It expects net interest margins to move sustainably above 3 per cent as 60-65 per cent of deposits are repriced and the loan mix shifts further towards higher-yielding retail and MSME segments. It said these changes have already resulted in sustained positive operating jaws, with revenue growth expected to continue outpacing operating expense growth as the transformed franchise scales up.
Nirmal Bang also said South Indian Bank has improved operating efficiency over the past two years through cost discipline, better use of existing infrastructure, investments in technology, digital journeys, process automation, and organisational capabilities. Nirmal Bang has initiated with a 'buy' coverage on the stock with a target price of Rs 62 on it.
Among other brokerage firm, ICICIDirect had a 'buy' rating on the stock with a target price of Rs 52, while Anand Rathi Share & Stock Brokers Ltd also gave it the same rating with a target price of Rs 59. ICICI Securities also has 'buy' on South Indian Bank with a target price of Rs 56.