Current Rating and Its Significance
MarketsMOJO’s 'Buy' rating for South Indian Bank Ltd indicates a positive outlook on the stock, suggesting that it is expected to outperform the broader market over the medium to long term. This rating is based on a comprehensive evaluation of the company’s quality, valuation, financial trend, and technical indicators. Investors should consider this recommendation as a signal of the stock’s favourable risk-reward profile in the current market environment.
Quality Assessment
As of 09 February 2026, South Indian Bank Ltd demonstrates strong operational quality. The bank maintains a low Gross Non-Performing Asset (NPA) ratio of 2.67%, which is a key indicator of asset quality and prudent lending practices. Additionally, the Net NPA ratio stands at a notably low 0.45%, reflecting effective risk management and recovery mechanisms. These figures underscore the bank’s robust credit portfolio and its ability to manage credit risk efficiently compared to many peers in the private sector banking space.
The company’s long-term fundamental strength is further highlighted by its impressive compound annual growth rate (CAGR) of 77.65% in net profits. This exceptional growth rate signals strong earnings momentum and operational scalability, which are critical factors in sustaining shareholder value over time.
Valuation Perspective
From a valuation standpoint, South Indian Bank Ltd is currently trading at an attractive level. The stock’s price-to-book (P/B) ratio is approximately 1, which suggests that the market values the company fairly relative to its net asset value. This valuation is particularly compelling given the bank’s strong return on assets (ROA) of 1%, indicating efficient utilisation of its asset base to generate profits.
Moreover, the company’s price-to-earnings-to-growth (PEG) ratio stands at 0.7, which is below 1, signalling that the stock may be undervalued relative to its earnings growth potential. This metric is especially relevant for growth-oriented investors seeking stocks with sustainable profit expansion at reasonable prices.
Financial Trend and Recent Performance
The latest financial data as of 09 February 2026 reveals a positive trend in South Indian Bank Ltd’s profitability and operational metrics. The profit before tax excluding other income (PBT LESS OI) for the December 2025 quarter was ₹17.99 crores, reflecting a remarkable growth rate of 124.6% compared to the previous four-quarter average. This surge in profitability highlights the bank’s improving core earnings capacity.
Stock returns have also been robust, with the company delivering a 1-year return of 62.61%, a 6-month return of 43.21%, and a year-to-date gain of 9.03%. These returns significantly outperform many peers in the private sector banking segment and the broader market indices, underscoring strong investor confidence and positive market sentiment.
Technical Analysis
Technically, South Indian Bank Ltd exhibits a bullish trend. The stock’s recent price movements show consistent upward momentum, supported by positive volume and favourable chart patterns. The 1-day price change of +1.26% and a 1-week gain of 11.23% further reinforce the stock’s current strength in the market.
Such technical indicators are valuable for investors seeking entry points or confirmation of the stock’s upward trajectory, complementing the fundamental strengths outlined above.
Summary of Key Metrics
To summarise, as of 09 February 2026:
- Mojo Score: 78.0, corresponding to a 'Buy' grade
- Gross NPA ratio: 2.67%
- Net NPA ratio: 0.45%
- Net profit CAGR: 77.65%
- PBT LESS OI (Q4 Dec 2025): ₹17.99 crores, up 124.6%
- ROA: 1%
- Price to Book Value: 1
- PEG ratio: 0.7
- Stock returns: 1Y +62.61%, 6M +43.21%, YTD +9.03%
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Implications for Investors
For investors, the 'Buy' rating on South Indian Bank Ltd suggests that the stock is well-positioned to deliver favourable returns, supported by strong fundamentals and positive market dynamics. The bank’s solid asset quality, attractive valuation, and accelerating profit growth provide a compelling investment case.
However, investors should also consider the broader economic environment and sector-specific risks inherent in the banking industry, such as credit cycles and regulatory changes. Continuous monitoring of the company’s quarterly results and market conditions is advisable to ensure alignment with investment objectives.
Conclusion
In conclusion, South Indian Bank Ltd’s current 'Buy' rating by MarketsMOJO, updated on 06 January 2026, reflects a confident outlook based on a thorough analysis of quality, valuation, financial trends, and technical factors. The latest data as of 09 February 2026 confirms the bank’s strong performance and growth potential, making it a noteworthy consideration for investors seeking exposure to the private sector banking segment.
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