South Indian Bank shares jump 11% to hit 52-week high; ICICIDirect sees further upside
The stock eventually settled 10.25 per cent higher at Rs 34.30. At this closing price, it has rallied 45.40 per cent over the last six months.
- Oct 10, 2025,
- Updated Oct 10, 2025 6:32 PM IST
Shares of South Indian Bank Ltd gained sharply on Friday, surging 10.67 per cent to touch a 52-week high of Rs 34.43. The stock eventually settled 10.25 per cent higher at Rs 34.30. At this closing price, it has rallied 45.40 per cent over the last six months.
According to ICICIDirect, the bank has undergone a significant turnaround since FY22, when pre-2020 corporate defaults and Covid-related delays had pushed gross non-performing assets (GNPA) to 5.9 per cent, impacting profitability.
The brokerage noted that South Indian Bank has since de-risked its balance sheet sharply, reducing its legacy stressed book from Rs 65,349 crore (63 per cent of advances in FY22) to Rs 16,973 crore (19 per cent in FY25) through recoveries and exits. This has driven GNPA down to 3.2 per cent, net NPA to 0.9 per cent, and improved provision coverage ratio (PCR) to 85 per cent. Nearly 98 per cent of its corporate book is now rated AAA or A+.
It highlighted that the bank's newly originated retail, MSME and selective corporate portfolios remain strong, with a GNPA of just 0.46 per cent. Enhanced underwriting standards, digital lending platforms and improved collections have contributed to a reduction in fresh slippages to 1.5 per cent, reflecting a sustained recovery trend.
ICICIDirect also noted that the management is rebalancing the loan mix to reduce corporate exposure from 42 per cent to around 35 per cent by FY27, while expanding MSME and retail segments, which already constitute 41 per cent of total advances in FY25. On the liabilities side, the focus on deposit granularity has brought down bulk deposits to 2.6 per cent and top 20 depositors’ share to 2.9 per cent.
With a CASA ratio of 32 per cent and a strong NRI deposit base of 28.7 per cent, the lender's cost of funds has improved to 4.8 per cent.
ICICIDirect expects advances to grow at 11.5–12 per cent CAGR over FY26–27, maintaining stable margins and asset quality. It values the stock at 0.9 times FY27E ABV with a target price of Rs 38 and recommends a 'BUY' rating.
South Indian Bank would declare its second quarter (Q2 FY26) results on October 16.
Shares of South Indian Bank Ltd gained sharply on Friday, surging 10.67 per cent to touch a 52-week high of Rs 34.43. The stock eventually settled 10.25 per cent higher at Rs 34.30. At this closing price, it has rallied 45.40 per cent over the last six months.
According to ICICIDirect, the bank has undergone a significant turnaround since FY22, when pre-2020 corporate defaults and Covid-related delays had pushed gross non-performing assets (GNPA) to 5.9 per cent, impacting profitability.
The brokerage noted that South Indian Bank has since de-risked its balance sheet sharply, reducing its legacy stressed book from Rs 65,349 crore (63 per cent of advances in FY22) to Rs 16,973 crore (19 per cent in FY25) through recoveries and exits. This has driven GNPA down to 3.2 per cent, net NPA to 0.9 per cent, and improved provision coverage ratio (PCR) to 85 per cent. Nearly 98 per cent of its corporate book is now rated AAA or A+.
It highlighted that the bank's newly originated retail, MSME and selective corporate portfolios remain strong, with a GNPA of just 0.46 per cent. Enhanced underwriting standards, digital lending platforms and improved collections have contributed to a reduction in fresh slippages to 1.5 per cent, reflecting a sustained recovery trend.
ICICIDirect also noted that the management is rebalancing the loan mix to reduce corporate exposure from 42 per cent to around 35 per cent by FY27, while expanding MSME and retail segments, which already constitute 41 per cent of total advances in FY25. On the liabilities side, the focus on deposit granularity has brought down bulk deposits to 2.6 per cent and top 20 depositors’ share to 2.9 per cent.
With a CASA ratio of 32 per cent and a strong NRI deposit base of 28.7 per cent, the lender's cost of funds has improved to 4.8 per cent.
ICICIDirect expects advances to grow at 11.5–12 per cent CAGR over FY26–27, maintaining stable margins and asset quality. It values the stock at 0.9 times FY27E ABV with a target price of Rs 38 and recommends a 'BUY' rating.
South Indian Bank would declare its second quarter (Q2 FY26) results on October 16.