Dividend of Rs. 10 per share; record date to be determined; purchase banking stock to qualify?
Tamilnad Mercantile Bank Ltd. is a mid-cap private sector organization with a market capitalization of Rs 7,804.35 Cr as of Wednesday’s BSE closing session. The board of directors of Tamilnad Mercantile Bank has recommended a 100% dividend for the fiscal year 2024 and announced the financial data for the quarter and fiscal year that concluded on March 31, 2024. Observers of the market may notice that the stock becomes the talk of the town after these announcements. In light of the Q4 results, let’s see what analysts have to say about the stock.
The dividend of Tamilnad Mercantile Bank
“The Board of Directors of the Bank have proposed the payment of final Dividend of Rs10/- per equity share of the face value Rs 10/- each (100%) for the financial year 2023-24, subject to the approval of the Shareholders at the subsequent Annual General Meeting (“AGM”) of the Bank. Tamilnad Mercantile Bank said in a regulatory filing that “the AGM date and the Record date for the purpose of the payment of final dividend will be announced in due course.”
Financials of Tamilnad Mercantile Bank
The bank’s overall revenue increased from Rs 85,348 crore in Q4FY23 to Rs 89,485 crore in Q4FY24. As of March 31, 2024, CASA has expanded by Rs 940 crore, from Rs 13,736 crore in the same quarter previous year to Rs 14,676 crore. The bank’s deposit increased to Rs 49,515 crores from Rs 47,766 crores in the same quarter of FY23. The net profit as of March 31, 2024, with a growth rate of 4.18%, was Rs 1072 crores, as opposed to Rs 1029 crores for the year that concluded on March 31, 2023. Net Interest Income (NII) increased from Rs 2,094 crore on March 31, 2023, to Rs 2,151 crore on March 31, 2024, at a growth rate of 2.72%.
The bank’s returns on equity (14.44%) and assets (1.84%) were 1.97 percent and 16.78 percent, respectively, the year before. The bank’s net value increased to Rs 7921 crores from Rs 6,928 crores the previous year, an absolute gain of Rs 993 crores, or a growth rate of 14.33%. While the Net Non-Performing Asset (NPA) was 0.85%, the Gross Non-Performing Asset (NPA) to Total Advances ratio was 1.44 %. For the same quarter previous year, these figures were, respectively, 1.39% and 0.62%.
Target Share Price for Tamilnad Mercantile Bank “Tamilnad Mercantile Bank is a well-known private sector bank in India that mainly serves four market segments: retail, corporate/wholesale, and Treasury. Investor interest in the small-cap company has recently increased as a result of its track record of returns, business fundamentals, and market momentum. For example, the 7,826 equities in the firm have returned an amazing 21.17% over the course of a year and have declared a dividend yield of 2.02%, which is over 2.5 times more than the 0.81% sector yield.
In any case, the stock’s undervaluation makes it profitable for many, as its PE ratio of 7.30 compares to the sector’s PE of 20.11. It is reasonable to state that the stock now exhibits bullish tendencies over the Rs. 503 level after examining these facts. Therefore, those looking to purchase this company in order to benefit from the sector’s momentum and development potential may think about doing so in the Rs. 503-504 area, with a target price of Rs. 510-550. To preserve their profits, they should put a stop loss around Rs. 490 and hold the stock for a period of five to forty days, according to V.L.A. Ambala, co-founder of Stock Market Today (SMT) and research analyst (SEBI registered).
