Rs 10/Share Dividend: Record Date In Due Course; Buy The Banking Stock To Be Eligible?

As of Wednesday's BSE closing session, Tamilnad Mercantile Bank Ltd.'s market cap was Rs 7,804.35 Cr, making it a mid-cap private sector institution. The Tamilnad Mercantile Bank Board of Directors has released its financial results for the quarter and fiscal year that ended on March 31, 2024, along with a 100% dividend recommendation for FY24. Following these announcements, market observers may find the stock turning into the talk of the town. Let's see what analysts have to say about the stock in light of the Q4 results.

Tamilnad Mercantile Bank Dividend

"The Board of Directors of the Bank have recommended 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 ensuing Annual General Meeting ("AGM") of the Bank. The AGM date and the Record date for the purpose of the payment of final dividend will be announced in due course," said Tamilnad Mercantile Bank in a regulatory filing.

Tamilnad Mercantile Bank Financials

From Rs 85,348 crore in Q4FY23 to Rs 89,485 crore in Q4FY24, the bank's total business has grown. From Rs 13,736 crore in the same quarter last year to Rs 14,676 crore as of March 31, 2024, CASA has grown by Rs 940 crore. In the same quarter of FY23, the bank's deposit was Rs 47,766 crores; it has now climbed to Rs 49,515 crores. With a growth rate of 4.18%, the net profit as of March 31, 2024, was Rs 1072 crores, compared to Rs 1029 crores for the year that ended on March 31, 2023. With a growth rate of 2.72%, the Net Interest Income (NII) climbed from Rs 2,094 crore on March 31, 2023 to Rs 2,151 crore on March 31, 2024.

The bank's Return on Asset at 1.84 % & Return on Equity at 14.44 % which was 1.97 % and 16.78% respectively in the previous year. With an absolute gain of Rs 993 crores, the bank's net worth climbed to Rs 7921 crores from Rs 6,928 crores the year before, representing a growth rate of 14.33%. The Gross Non-Performing Asset (NPA) to Total Advances ratio was 1.44 %, while the Net NPA was 0.85 %. These numbers were 1.39% and 0.62%, respectively, in the same quarter last year.

Tamilnad Mercantile Bank Share Price Target

"Tamilnad Mercantile Bank is an Indian private sector bank that primarily operates in four segments - Treasury, Corporate/Wholesale Banking, and Retail Banking, and enjoys popularity in the market segment. Recently, the small-cap stock has garnered the attention of investors due to its market momentum, business fundamentals, and track of returns. For instance, the company's 7,826 stocks have delivered an impressive 21.17% returns in a year and declared a dividend yield of 2.02%, around 2.5X the sector yield of 0.81%.

Regardless, the stock has a PE ratio of 7.30 against the sector PE of 20.11, which makes it lucrative for many due to its undervaluation. After weighing these factors, it is safe to say that the stock currently displays bullish tendencies above the Rs. 503 mark. Hence, individuals who intend to enter this stock to capitalize on its growth prospects and sector momentum can consider buying it at Rs. 503-504 range for a target of Rs. 510-550. However, they must hold it for 5-40 days to allow the stock to perform but set a stop loss at Rs. 490 to protect the gains," said V.L.A. Ambala, a Research Analyst (SEBI Registered), Co-founder - Stock Market Today (SMT).

Disclaimer

The recommendations made above are by market analysts and are not advised by either the author, nor Greynium Information Technologies. The author, nor the brokerage firm nor Greynium would be liable for any losses caused as a result of decisions based on this write-up. Goodreturns.in advises users to consult with certified experts before making any investment decision.