South Indian Bank Downgraded to 'Sell' by MarketsMOJO, Institutional Investors Decrease Stake

South Indian Bank, a midcap private bank, has recently been downgraded to a 'Sell' by MarketsMOJO on September 30, 2024. This decision was based on various technical factors such as the stock being in a bearish range, deteriorating technical trend, and bearish indicators like MACD, Bollinger Band, and KST.
In addition, institutional investors have decreased their stake in the company by -1.29% over the previous quarter, holding only 18.55% collectively. This suggests that these investors, who have better resources and capabilities to analyze company fundamentals, have also lost confidence in the stock.

Furthermore, South Indian Bank has significantly underperformed the market (BSE 500) in the last year, generating negative returns of -1.45% while the market has seen a 39.48% increase. However, the company has shown healthy long-term growth with an annual net profit growth rate of 31.30%. It has also declared positive results for the last 10 consecutive quarters, with a PAT (9M) of Rs 887.05 crore, growing at 38.82%, and a credit deposit ratio (HY) of 77.40%.

Despite these positive factors, the stock is currently trading at a discount compared to its historical valuations, with a very attractive valuation of 0.7 price to book value and a PEG ratio of 0.3. However, considering the recent downgrade and the bearish technical indicators, it may be wise for investors to exercise caution before investing in South Indian Bank.