South Indian Bank shares dive 17% as MD & CEO opts out of reappointment

Shares of South Indian Bank fell sharply on Wednesday after the lender's board of directors considered the request of managing director and chief executive officer (MD & CEO) Murali Ramakrishnan to not apply for an extension of his tenure. The stock cracked 16.63 per cent to hit a day low of Rs 13.79 over its previous close of Rs 16.54. At today's low price of Rs 13.79, the scrip traded 36.74 per cent lower from its 52-week high of Rs 21.80, a level seen on December 15, 2022. That said, it traded 89.68 per cent higher than its one-year low level of Rs 7.27, hit on June 20 last year. On a year-to-date (YTD) basis, the counter has lost 24.42 per cent.

Around 89.49 lakh shares changed hands today, which was more than thrice compared to the two-week average volume of 27.68 lakh shares. Turnover on the counter stood at Rs 12.78 crore, commanding a market capitalisation (m-cap) of Rs 2,986.34 crore. There were 12,48,808 sell orders today against buy orders of 8,04,602 shares.

"This is to inform that the board of directors of the bank, in their meeting held today, i.e., March 28, 2023, considered the request of Mr. Murali Ramakrishnan, managing director & CEO, not to offer himself for re-appointment due to personal reasons/family circumstances, on completion of his current term, i.e. up to September 30, 2023," the bank stated in an exchange filing.

The search committee, constituted by the board, will identify and evaluate suitable candidates for the position of managing director and CEO, it added.

The stock was last seen trading higher than the 200-day moving averages but lower than the 5-day, 20-day, 50-day and 100-day moving averages. The counter's 14-day relative strength index (RSI) came at 24.54. A level below 30 is defined as oversold while a value above 70 is considered overbought. The company's stock has a price-to-equity (P/E) ratio of 4.85.

South Indian Bank has an average target price of Rs 20, Trendlyne data showed, suggesting a potential upside of 38.41 per cent. The stock has a one-year beta of 0.79, indicating low volatility.

The lender is a major private sector bank headquartered at Thrissur in Kerala, which has 933 branches, four service branches, and 18 regional offices spread across India. The bank has also set up more than 1,200 ATMs and 120 cash deposit machines.

On the earnings front, South Indian Bank reported a net profit of Rs 102.75 crore in the December 2022 quarter (Q3 FY23) against a loss of Rs 50.31 crore during the corresponding period of the previous year.

Meanwhile, Indian equity benchmarks traded higher in early trade today, led by gains in automobile, financials, consumer goods and metal stocks.

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