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Quarterly performance largely backed by improved realisations

Medium-term triggers China plus and protectionist measures for tyre industry

Valuations not inexpensive; but improved medium-term outlook


Better sequential loan book growth, but lags industry average 
Sharp jump in deposits sequentially, CASA growth healthy
Margins stable, but sustainability to be a challenge
Asset quality metrics trending up, high provision coverage
ROA healthy on low credit cost
Valuation undemanding but re-rating unlikely

Tamilnad Mercantile Bank (TMB; CMP: Rs 420; M Cap: Rs 6,650 crore) has reported a surprisingly healthy sequential growth in deposit as well as advances in the fourth quarter of FY23 (Q4FY23).

Moreover, the old private sector bank clocked around 12 percent…


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