South Indian Bank shares have given multibagger returns of 180 percent to its shareholders over a one-year period. The stock is already up 182 percent from its 52-week low of Rs 7.86, hit on August 24 last year. The scrip is trading 1.38 percent lower at Rs 22.13 apiece on the BSE during Monday's late afternoon deals.

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In the last five session, the banking stock has risen 8 percent. South Indian Bank shares have rallied 200 percent in a span of three years and gained 15 percent on a year-to-date basis.

Domestic brokerage house ICICI Securities has a 'Buy' rating on the counter, with a revised target price of Rs 28 from Rs 25 earlier. This implies an upside potential of 27 percent from the current market levels. The brokerage has also raised its target multiple from 0.7 times to 0.8 times.

RBI approves candidature of PR Seshadri as MD & CEO

The Reserve Bank of India (RBI) has recently approved the candidature of PR Seshadri, ex MD and CEO of Karur Vysya Bank, as the Managing Director and chief executive officer of the Kerala-based South Indian Bank (SIB).

Seshadri has been appointed as the MD and CEO for a period of three years, with effect from October 1, 2023.

"In our view, Seshadri was instrumental in putting newage lending practices, overhauling risk architecture and transforming HR practices at Karur Vysya Bank (KVB) during his term (Sep’17-Mar’20), a time when the banking system was undergoing severe profitability pressure due to corporate asset quality cycle," ICICI Securities said.

The brokerage sees the RBI approval for appointment of Seshadri as MD and CEO as a key positive for the stock of SIB.

It believes that the ongoing transformation journey at SIB, initiated by incumbent MD & CEO, Murali Ramakrishnan, should get accelerated.

"We are not changing our earnings estimate as of now. We had earlier highlighted that the fitment and candidature of the new MD and CEO would be critical for rerating of the stock," it said.

SIB Q1 numbers

South Indian Bank had posted a strong set of numbers for the June 2023 quarter. The lender's net profit climbed 75 percent to Rs 202 crore for the June 2023 quarter, compared to Rs 115 crore in the corresponding quarter of last fiscal.

Gross non-performing assets (GNPAs) declined by 74 basis points from 5.87 percent to 5.13 percent on a year-on-year basis. Net non-performing assets slipped by 102 bps from 2.87 percent to 1.85 percent YoY.

The bank's net interest income surged 33.87 percent to Rs 807.77 crore in the June 2023 quarter as against Rs 603.38 crore in the year-ago quarter.

Operating profit in the quarter under review rose 54.74 percent to Rs 490.24 crore from Rs 316.82 crore in the June quarter of the previous fiscal.