SOUTH INDIAN BANK LTD - Quantamental Equity Research

	Quantamental Equity Research on SOUTH INDIAN BANK LTD | Release: 27 Nov 2018 16:45:39 UTC+05:30 | Reporting Currency: INR | Trading Currency: INR | Exchange:NSE/BSE NSE CODE:SOUTHBANK and BSE CODE:532218
	Last Close:	INR 14.9
	Fair Value:	INR 19.75
	Est. Price by Mar 19:	INR 17
	Market Capitalization (INR Crs):	2696.43
	Industry:	Banks
	Rating:	STRONG BUY
	Upside:	33%
	Company Profile
	The South Indian Bank (the Bank) provides retail and corporate banking, Para banking activities, such as debit card, third-party product distribution, in addition to Treasury and Foreign Exchange Business. The Bank's segments include Treasury, Corporate/Wholesale Banking, Retail banking and Other Banking Operations.
	Growth Per Share
	Particulars	1-Year	3-Year	5-Year
	Revenue %	6%	40%	66%
	EBIT %	-1%	8%	24%
	Earnings %	-15%	9%	-33%
	Book Value %	9%	45%	75%
	Stock Total Return %	12%	12%	20%
	Share holding pattern
	Particulars	%age
	(A) Promoter & Promoter Group	0.00
	(B) FII/FPI	30.16
	(C) DII/Insurance Companies	12.45
	(D) Public holding < 2 lakhs of cap.	32.82
	(E) Others	24.57
	Grand Total	100.00
	Fundamentals (Historical and Estimated)
	Particulars	Mar-10	Mar-11	Mar-12	Mar-13	Mar-14	Mar-15	Mar-16	Mar-17	Mar-18	Mar-19 E	Mar-20 E	Mar-21 E	Mar-22 E	Mar-23 E
	Price	16	21	22	21	21	23	16	23	26	17	20	23	25	27
	Return on Equity	16%	17%	20%	18%	16%	9%	9%	9%	7%	7%	8%	9%	9%	9%
	Price to Earning	7.7	8.1	6.2	5.7	5.7	10.0	6.6	10.5	13.8	7.8	7.8	7.8	7.8	7.8
	EVTI	8.4	8.9	7.9	7.5	7.2	7.5	7.5	8.0	8.9	8.7	8.7	8.7	8.7	8.7
	EVTIFM	7.7	8.1	6.2	5.7	5.7	10.0	6.6	10.5	13.8	7.8	7.8	7.8	7.8	7.8
	Price to Book Value	1.2	1.4	1.2	1.0	0.9	0.9	0.6	0.9	0.9	0.6	0.6	0.7	0.7	0.7
	Debt to Equity	15.9	17.7	18.3	15.9	15.5	15.7	15.7	14.8	15.2	15.5	15.6	15.4	15.0	14.5
	Dividend Yield	3%	2%	3%	3%	4%	3%	3%	2%	2%	3%	3%	3%	3%	3%
	Cash Flow to Firm	-11%	-11%	-10%	-5%	6%	3%	5%	0%	-5%	-1%	1%	2%	3%	4%
	Detailed Estimates
	Title	Mar-18	Mar-19 E	Mar-20 E	Mar-21 E	Mar-22 E	Mar-23 E
	Sales	6,192.81	6,854.78	7,490.00	8,077.57	8,596.33	9,026.15
	EBITDA	4,790.91	4,894.71	5,348.30	5,767.86	6,138.29	6,445.20
	EBIT	4,727.18	4,824.17	5,277.53	5,704.42	6,081.42	6,394.23
	PBT	499.89	596.88	698.98	796.53	873.17	925.77
	NPAT	334.89	394.00	461.40	525.79	576.38	611.10
	Price to Earning	13.78	7.79	7.79	7.79	7.79	7.79
	Price to Book Value	0.92	0.58	0.63	0.67	0.69	0.68
	Debt to Equity	15.21	15.51	15.55	15.38	15.02	14.52
	Return on Equity	0.07	0.07	0.08	0.09	0.09	0.09
	Enterprise Value to Total Income (EVTI)	8.87	8.70	8.73	8.74	8.74	8.72
	Enterprise Value to Total Income to Firm Margin(EVTIFM)	26.75	28.80	28.86	28.84	28.78	28.68
	Price or Est. Share Prices	25.51	17.00	19.95	22.75	24.95	26.50
	DISCOUNTED CASH FLOW
	Title	Mar-19 E	Mar-20 E	Mar-21 E	Mar-22 E	Mar-23 E
	PBT	596.88	698.98	796.53	873.17	925.77
	Interest	4,227.29	4,578.55	4,907.89	5,208.25	5,468.46
	Depreciation	70.54	70.77	63.44	56.87	50.97
	Cash Flow Before Tax	4,894.71	5,348.30	5,767.86	6,138.29	6,445.20
	Tax Rate	33.99	33.99	33.99	33.99	33.99
	Cash Flow After Tax	3,231.00	3,530.42	3,807.36	4,051.88	4,254.48
	Terminal Cash Flow	-				109,729.99
	Total Cash Flow	3,231.00	3,530.42	3,807.36	4,051.88	113,984.47
Present Value of Cash Flow					105,747.17
Debt					102,178.62
Value of Equity					3,568.55
Fair Value Per Share					19.75
Equity					2,696
Debt					76,073
Beta	Take from Reuters				1.26
Risk Free Rate	Prevailing Yield in India				8%
Market Risk Premium	Assuming 8.82% premium for Equity Investments				9%
Interest Paid					4,227
Tax Benefit					1,395
Interest Net of Tax					2,832
Debt					76,073
Cost of Debt					4%
Cost of Equity					19%
Debt Weight					97%
Equity Weight					3%
WACC					4%
Cash Flow of Mar-23 E					4,254.48
Growth					0.2%
Present Value of Terminal Cashflow					109,729.99
Peer Comparision
#	Name	CMP Rs.	Mar Cap Rs.Cr.	B.V. Rs.	Annualized ROE %	ROCE %	Latest EVTI	Latest EVTIFM	CMP / BV	P/E	Debt / Eq	Div Yld %	Growth Rate R %	SGR %	Ann Total Income	PQEIOI	QoQ Sales %	Qtr Sales Var %	QoQ Profits %	Qtr Profit Var %	Graham's Number Rs.
1	Yes Bank	187.90	43,442	111.41	18.44	7.42	6.49	17.08	1.69	9.69	10.70	1.43	15.73	-988.14	34,819	19.19	-85	9.93	50.64	-23.46	-3.79
2	IndusInd Bank	1,562.75	94,040	389.94	19.50	7.97	8.17	25.73	4.01	24.46	8.09	0.48	17.07	-352.17	27,021	10.98	-237	7.30	29.22	-11.15	4.56
3	ICICI Bank	356.35	229,448	158.65	4.43	4.98	9.39	35.10	2.25	66.32	7.28	0.42	3.80	22.67	73,048	-	-102	2.60	11.26	-860.25	-55.84
4	Bandhan Bank	453.55	54,100	78.65	26.49	10.59	10.13	27.07	5.77	32.64	3.64	0.22	24.15	-393.50	7,344	82.28	210	3.18	43.35	1.23	47.29
5	Federal Bank	81.05	16,061	61.59	10.95	6.05	8.06	20.70	1.32	17.20	10.12	1.23	8.49	202.18	12,351	-	-283	3.66	16.19	1.27	0.89
6	South Ind.Bank	14.90	2,696	27.63	7.03	6.15	7.57	18.19	0.54	8.37	15.21	2.68	5.51	68.81	7,418	-	-31	2.58	10.44	204.38	1,523.38