As we journey through this article, we’ll uncover the factors influencing this bank’s stock price prediction. But that’s not all – we’ll also explore the bank’s shareholding pattern, where public investors and institutional players come into play.
But what does all of this mean for the broader economy? That’s where things get fascinating. Banks like Tamilnad Mercantile Bank. aren’t just financial institutions; they’re the engines that power economic progress. Their stability and growth potential are closely intertwined with the prosperity of our nation.
About Tamilnad Mercantile Bank
Born in 1921, TMB has indeed come a long way, evolving into one of India’s oldest private sector banks. Fast forward to today, and it stands firmly as a banking institution deeply rooted in history.
TMB has a strong presence in Tamil Nadu with 369 branches, but it doesn’t end there. They operate in 15 other states and 4 union territories, covering the entire nation. In FY22, a remarkable 75.06% of their total business came from Tamil Nadu, with 4.32 million customers, constituting a significant 85.03% of their customer base. Tamil Nadu trusts them wholeheartedly.
Now, let’s turn to their financial strength in FY22. TMB boasts impressive ratios: a remarkable GNPA ratio of 1.69%, a low NPA ratio of 0.95%, an astounding PCR at 87.95%, a commendable Slippage Ratio of 1.5%, and a low Credit Cost of 1.2%.
When it comes to its product offerings, TMB caters to a wide range of financial needs. They neatly classify their services into two categories: Asset Products (such as loans) and Deposit Products (where you securely park your savings). In FY22, they allocated a substantial 37% to MSMEs, 30% to agriculture, 20% to retail, and 13% to corporate segments, showcasing a well-thought-out diversification strategy.
Nevertheless, as with any journey, TMB faces its share of challenges. Currently, 37.61% of their equity share capital, approximately 5.376 crore equity shares, are embroiled in ongoing legal battles. These disputes involve regulatory authorities like the Reserve Bank of India (RBI) and the Directorate of Enforcement, some of whom have previously imposed penalties on the bank. This challenge underscores their resilience and unwavering commitment to navigating complex terrain while maintaining their dedication to customers and stakeholders.
Tamilnad Mercantile Bank Q3 2024 Financial Highlights
- Net Profit: Reported a net profit of Rs 284 crore in Q3 2023, compared to Rs 280 crore in the same quarter of the previous financial year.
- Total Income: Recorded a growth in total income, reaching Rs 1,387 crore in the current quarter, up from Rs 1,173 crore in the corresponding period last year.
- Total Business: The bank’s total business for Q3 2023 increased to Rs 85,185 crore, compared to Rs 78,242 crore in the same quarter of the previous year.
- Thrust on Priority Sectors: The bank emphasized lending to priority sectors, with agriculture, micro, small and medium enterprises, and housing constituting 75% of the Adjusted Net Bank Credit (ANBC), surpassing the regulatory requirement of 40%.
- Branch Expansion and New Schemes: Opened six new branches during the quarter and introduced a new current account scheme, ‘TMB RERA Current Account,’ tailored for builders and land developers.
- New Loan Products: Launched two new loan products, ‘TMB Home Elite’ and ‘TMB Mini Lap,’ during the quarter ending on December 31, 2023.
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| When | Maximum Price | Minimum Price |
| February 2024 | 534.60 | 464.87 |
| March 2024 | 545.51 | 474.36 |
| April 2024 | 529.62 | 460.54 |
| May 2024 | 521.79 | 453.73 |
| June 2024 | 540.58 | 470.07 |
| July 2024 | 535.17 | 465.37 |
| August 2024 | 556.58 | 483.98 |
| September 2024 | 578.84 | 503.34 |
| October 2024 | 567.49 | 493.47 |
| November 2024 | 584.52 | 508.28 |
| December 2024 | 599.13 | 520.98 |
Tamilnad Mercantile Bank’s share price is anticipated to exhibit a fluctuating trend throughout 2024. Starting at a current price of ₹495, the projected maximum and minimum prices range from ₹599 to ₹520 in December. With a market capitalization of ₹7,834 crore, the stock’s high/low for the year is ₹611/₹396. The stock’s price-to-earnings ratio stands at 7.31, with a book value of ₹438 and a dividend yield of 1.01%. Investors can anticipate a dynamic market for Tamilnad Mercantile Bank shares in the upcoming months.
| When | Maximum Price | Minimum Price |
| January 2025 | 611.11 | 470.09 |
| February 2025 | 626.78 | 482.14 |
| March 2025 | 651.23 | 500.94 |
| April 2025 | 638.46 | 491.12 |
| May 2025 | 619.86 | 476.82 |
| June 2025 | 647.76 | 498.27 |
| July 2025 | 635.06 | 488.50 |
| August 2025 | 654.70 | 503.61 |
| September 2025 | 677.61 | 521.24 |
| October 2025 | 695.23 | 534.79 |
| November 2025 | 712.61 | 548.16 |
| December 2025 | 730.43 | 561.87 |
- The maximum price during the year occurred in December 2025 at ₹730.43.
- The minimum price during the year was recorded in January 2025 at ₹470.09.
| When | Maximum Price | Minimum Price |
| January 2026 | 752.34 | 578.72 |
| February 2026 | 771.63 | 593.56 |
| March 2026 | 801.72 | 616.71 |
| April 2026 | 786.00 | 604.62 |
| May 2026 | 763.11 | 587.01 |
| June 2026 | 797.45 | 613.42 |
| July 2026 | 781.81 | 601.39 |
| August 2026 | 805.99 | 619.99 |
| September 2026 | 834.20 | 641.69 |
| October 2026 | 855.89 | 658.38 |
| November 2026 | 877.29 | 674.84 |
| December 2026 | 899.22 | 691.71 |
- The maximum price during the year occurred in December 2026 at ₹899.22.
- The minimum price during the year was recorded in January 2026 at ₹578.72.
| When | Maximum Price | Minimum Price |
| January 2027 | 917.21 | 705.54 |
| February 2027 | 940.72 | 723.63 |
| March 2027 | 977.41 | 751.85 |
| April 2027 | 958.25 | 737.11 |
| May 2027 | 930.34 | 715.64 |
| June 2027 | 972.20 | 747.85 |
| July 2027 | 953.14 | 733.18 |
| August 2027 | 982.62 | 755.86 |
| September 2027 | 1,017.01 | 782.31 |
| October 2027 | 1,043.45 | 802.65 |
| November 2027 | 1,069.54 | 822.72 |
| December 2027 | 1,096.28 | 843.29 |
| When | Maximum Price | Minimum Price |
| January 2028 | 1,118.20 | 860.15 |
| February 2028 | 1,146.87 | 882.21 |
| March 2028 | 1,191.60 | 916.62 |
| April 2028 | 1,168.24 | 898.64 |
| May 2028 | 1,134.21 | 872.47 |
| June 2028 | 1,185.25 | 911.73 |
| July 2028 | 1,162.01 | 893.85 |
| August 2028 | 1,197.95 | 921.50 |
| September 2028 | 1,239.88 | 953.75 |
| October 2028 | 1,272.11 | 978.55 |
| November 2028 | 1,303.92 | 1,003.01 |
| December 2028 | 1,336.51 | 1,028.09 |
| When | Maximum Price | Minimum Price |
| January 2029 | 1,363.24 | 1,048.65 |
| February 2029 | 1,398.20 | 1,075.54 |
| March 2029 | 1,452.73 | 1,117.48 |
| April 2029 | 1,424.24 | 1,095.57 |
| May 2029 | 1,382.76 | 1,063.66 |
| June 2029 | 1,444.99 | 1,111.53 |
| July 2029 | 1,416.65 | 1,089.73 |
| August 2029 | 1,460.47 | 1,123.44 |
| September 2029 | 1,511.58 | 1,162.76 |
| October 2029 | 1,550.88 | 1,192.99 |
| November 2029 | 1,589.66 | 1,222.81 |
| December 2029 | 1,629.40 | 1,253.38 |
| When | Maximum Price | Minimum Price |
| January 2030 | 1,661.98 | 1,278.45 |
| February 2030 | 1,704.60 | 1,311.23 |
| March 2030 | 1,771.08 | 1,362.37 |
| April 2030 | 1,736.35 | 1,335.66 |
| May 2030 | 1,685.78 | 1,296.75 |
| June 2030 | 1,761.64 | 1,355.11 |
| July 2030 | 1,727.10 | 1,328.54 |
| August 2030 | 1,780.51 | 1,369.62 |
| September 2030 | 1,842.83 | 1,417.56 |
| October 2030 | 1,890.74 | 1,454.42 |
| November 2030 | 1,938.01 | 1,490.78 |
| December 2030 | 1,986.46 | 1,528.05 |
Tamilnad Mercantile Bank Financial Condition (Last 5 Years)
| Mar 2019 | Mar 2020 | Mar 2021 | Mar 2022 | Mar 2023 | |
| Revenue (In Crore INR) |
3,224 | 3,466 | 3,609 | 3,834 | 4,081 |
| Interest (In Crore INR) |
1,994 | 2,147 | 2,072 | 2,019 | 1,987 |
| Expenses + (In Crore INR) |
1,350 | 1,231 | 1,355 | 1,470 | 1,276 |
| Financing Profit (In Crore INR) |
-120 | 89 | 183 | 346 | 818 |
| Financing Margin % | -4% | 3% | 5% | 9% | 20% |
| Other Income + (In Crore INR) | 414 | 526 | 644 | 812 | 629 |
| Depreciation (In Crore INR) |
36 | 30 | 29 | 33 | 54 |
| Profit before tax (In Crore INR) |
259 | 585 | 798 | 1,125 | 1,394 |
| Tax % | 0% | 30% | 24% | 27% | 26% |
| Net Profit + (In Crore INR) |
259 | 408 | 603 | 822 | 1,029 |
| EPS in Rs | 18.14 | 28.61 | 42.34 | 57.67 | 65 |
| Dividend Payout % | 13% | 13% | 0% | 9% | 8% |
- Revenue steadily increased from ₹3,224 in March 2019 to ₹4,081 in March 2023.
- Interest expenses fluctuated but ended at ₹1,987 in March 2023.
- Expenses showed fluctuations, reaching ₹1,470 in March 2022 but decreasing to ₹1,276 in March 2023.
- Other income increased from ₹414 in March 2019 to ₹812 in March 2023.
- Depreciation remained relatively stable, increasing from ₹36 in March 2019 to ₹54 in March 2023.
- Profit before tax witnessed substantial growth, rising from ₹259 in March 2019 to ₹1,394 in March 2023.
- Tax percentages fluctuated but stayed within a reasonable range.
- Net profit increased steadily from ₹259 in March 2019 to ₹1,029 in March 2023.
- Dividend payout percentages varied, starting at 13% in March 2019, reaching 0% in March 2021, and stabilizing around 8% in March 2023.
FAQs
What Is The Current Stock Price of The Bank?
The current stock price for the company stands at ₹495.
The share price target for 2025 shows a range from ₹470.09 to ₹730.43, reflecting significant fluctuations throughout the year.
The share price target for 2030 exhibits a substantial range, with prices fluctuating between ₹1,278.45 and ₹1,986.46 during the year.
What Is The Tamilnad Mercantile Bank Price-to-Earnings ratio?
The company’s Price-to-Earnings (P/E) ratio is 7.31.
What Is The Tamilnad Mercantile Bank’s Return on Equity?
The company has maintained a steady Return on Equity (ROE) of 14% over the past 5 years, with a recent improvement to 17% in the last year, reflecting its ability to generate favorable returns for shareholders.
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Should One Invest In Tamilnad Mercantile Bank?
Considering the financial indicators and potential risks, it’s best to err on the side of caution when it comes to investing in this company. Here’s why:
Firstly, the low-interest coverage ratio is a clear red flag. This ratio suggests that the company might be struggling to meet its interest payment obligations. That’s not a great sign of financial stability.
Additionally, there’s the possibility that the company is capitalizing on interest costs, which can distort its financial health. This kind of practice can make the company look better on paper than it is.
Then, we have the sales growth, which has been rather lackluster at just 4.66% over the last five years. This indicates that the company might not be making significant headway in expanding its market presence.
And let’s not forget about those contingent liabilities, totaling a hefty ₹6,519 Crore. These represent potential future financial burdens, and their sheer magnitude raises serious questions about the company’s ability to handle them effectively.
Oh, and there’s the ongoing legal disputes, as we discussed earlier. These disputes not only pose financial risks but could also disrupt the company’s operations and reputation.
Now, while the company has shown impressive profit growth, with a CAGR of 35.9% over the past five years, it’s important to remember that high profits alone don’t always paint the full picture.
All these factors combined create a rather challenging investment environment. So, it might be a good idea to explore more stable and less risky investment opportunities in the market. Before making any investment decisions, it’s crucial to consider your risk tolerance and investment goals carefully.
What did we learn?
- 1 About Tamilnad Mercantile Bank
- 2 Tamilnad Mercantile Bank Q3 2024 Financial Highlights
- 3 How to purchase Tamilnad Mercantile Bank shares?
- 4 Tamilnad Mercantile Bank Share Price Target 2024 – 2030
- 4.1 Tamilnad Mercantile Bank Share Price Target 2024
- 4.2 Tamilnad Mercantile Bank Share Price Target 2025
- 4.3 Tamilnad Mercantile Bank Share Price Target 2026
- 4.4 Tamilnad Mercantile Bank Share Price Target 2027
- 4.5 Tamilnad Mercantile Bank Share Price Target 2028
- 4.6 Tamilnad Mercantile Bank Share Price Target 2029
- 4.7 Tamilnad Mercantile Bank Share Price Target 2030
- 5 Tamilnad Mercantile Bank Financial Condition (Last 5 Years)
- 6 FAQs
- 6.1 What Is The Current Stock Price of The Bank?
- 6.2 What Is The Share Price Target For Tamilnad Mercantile Bank By 2025?
- 6.3 What Is The Share Price Target For Tamilnad Mercantile Bank By 2030?
- 6.4 What Is The Tamilnad Mercantile Bank Price-to-Earnings ratio?
- 6.5 What Is The Tamilnad Mercantile Bank’s Return on Equity?
- 7 Should One Invest In Tamilnad Mercantile Bank?
