This Private Bank Stock Surprises With Dividend Higher Than Axis, RBL, DCB & IDFC; Time To ADD?

With its headquarters located in Thoothukudi, Tamilnad Mercantile Bank Ltd (TMB) is a well-known old private sector bank with a legendary 103-year history. With 578 branches and 12 Regional Offices spread throughout 17 states and 4 Union Territories, TMB has a nationwide presence in India and provides services to over 5.3 million satisfied customers. With a market valuation of Rs 7,109.19 Cr, Tamilnad Mercantile Bank's shares closed Friday at Rs 448.95 a share, down 1.66% on the NSE. Tamilnad Mercantile Bank Ltd. (TMB) has announced impressive financial results for the quarter and fiscal year ending March 31, 2025. On the other hand, the bank has recommended a final dividend for FY25, which is significantly higher than other private banks that have announced Q4 results and dividends, such as Axis Bank and RBL Bank paying Rs 1 per share, DCB Bank paying Rs 1.35 per share, and IDFC First Bank paying Rs 0.25 per share.

Tamilnad Mercantile Bank Dividend

"The Board of Directors of the Bank have recommended the payment of final Dividend of ₹11/- per equity share of the face value ₹10/- each (110%) for the financial year 2024-25, 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 stock exchange filing.

Tamilnad Mercantile Bank Q4 Results

In the fourth quarter of 2024-2025, the bank reported a 15% increase in net profit, reaching Rs 291.9 crore from Rs 253.06 crore in the same quarter of the previous fiscal year. In the fiscal year 2025, it increased by 10.35% to Rs 1,183 crore from Rs 1,072 crore in the previous year. Net interest income (NII) jumped slightly 0.2% YoY to Rs 567.9 crore in Q4FY25 from Rs 567 crore in Q4FY24, while interest income increased by 9.14% YoY to Rs 5,291 crore in FY25 from Rs 4,848 crore in FY24.

The bank reported that its operating profit climbed 17.81%, from Rs 1,482 crore in FY24 to Rs 1,746 crore in FY25, while its total income increased 11.82% YoY to Rs 6,142 crore in the financial year ended March 31, 2025, from Rs 5,493 crore in the previous fiscal year. According to the bank, its overall business grew by 9.58% YoY to Rs 98,055 crore in FY25 from Rs 89,485 crore in FY24.

The bank said that its Net NPA dropped to 0.36% from 0.85%, improving by 49 bps, while its Gross NPA dropped to 1.25% from 1.44%, improving by 19 bps. With an absolute gain of Rs 1,088 crores, the bank's net worth grew to Rs 9,009 crores (PY Rs 7,921 crores), representing a growth rate of 13.74%. During FY 24-25, the bank launched 26 new branches.

Tamilnad Mercantile Bank Share Price Target

"Tamilnad Mercantile Bank is under pressure with a weak chart structure. The stock is struggling to sustain above ₹460 and is facing consistent selling on rises. A breakdown below ₹440 could lead to further decline towards ₹420. With no strong reversal signals yet, the outlook remains negative, and caution is advised for long trades," commented Riyank Arora - Technical Analyst - Mehta Equities Limited.

Disclaimer

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