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News: South Indian Bank reported muted performance in Q4FY24 wherein NII growth remained at 2% YoY, despite 12% YoY growth in advances, owing to margins erosion at 3.38%. Other income remained flat led by lower recoveries. However, continued investment in technology and distribution kept opex growth elevated at 23% YoY which resulted in a 14% YoY de-growth in earnings at Rs 288 crore. With robust asset quality in new book, overall GNPA declined 24 bps QoQ at 4.5% while PCR improved to 79%.
Views: While performance of new book continued to remain robust in-line with guidance, operational performance remains volatile which led to correction in stock price. Guidance on growth and operational performance remains watchful to act as catalyst for valuation.
Impact: Neutral