Nuvama Bullish On Small Cap Bank Stock, Suggests Buy For 33% Gains, Trading Near 52-Week High

Broking firm Nuvama has come up with a Buy recommendation on CSB Bank (CSBBANK), a small-cap private sector bank, for a target price of Rs 370 apiece. Considering the given target price, if you buy the stock at the current market price, it can fetch you potential gains of up to 33%.

According to the broking firm, Strong growth in the non-gold loan portfolio, which was missing in recent quarters, was the key highlight in CSB Bank's (CSBBANK) Q4FY23 earnings. Although NIM fell sharply QoQ and resulted in an NII miss, robust other income led to a better-than-expected PPOP. Yet another quarter of negative provisioning drove a comfortable PAT beat. Slippage ratio rose sequentially, but overall asset quality improved.

Buy for a Target Price of Rs 370 apiece

Nuvama said, "At the CMP, the stock is trading at 1.1x FY25E ABV. The bank has industry-leading margin, strong return ratios, and robust asset quality. With an expected credit growth of more than 20%, driven by multiple segments, and stable asset quality, we foresee a re-rating. We maintain 'BUY' with a revised TP of INR370, implying an upside of 32% from its CMP."

Stock Outlook

The last traded share price of CSB Bank is Rs 279.50 apiece on NSE, down 4.67% from its previous close of Rs 293.20 apiece. The stock is trading 6.11% down its 52 week high of Rs 297.70 apiece, which it traded on 28 April 2023. While its 52 week low is Rs 178 apiece, which it traded on 21 June 2022.

Stock's Returns

The stock has fallen 1.17% in the past 1 week. It gained 14.31% in 1 month and 14.27% in 3 months, respectively. The stock has given 28.95% positive return in 1 year and 138.28% positive return in 3 years. since its listing, it has given 6.85% negative return. It was listed on 4 December 2019.

About - CSB Bank

Established in 1920 as The Catholic Syrian Bank Limited, CSB Bank is currently the oldest private sector bank in Kerala. The bank is engaged in the business of banking Services. It focuses on SME, retail, and NRI customers. It has a market capitalisation of Rs 4,848.93 crore.

Disclaimer - The stock has been picked from the brokerage report of Nuvama. Greynium Information Technologies, the Author, and the respective Brokerage house are not liable for any losses caused as a result of decisions based on the article. Goodreturns.in advises users to consult with certified experts before making any investment decision.