Tamilnad Mercantile Bank Ltd

Price story Before the numbers, the tape. A stock price moves through four repeating seasons: a flat base (stage 1), an advance (2), a top (3), a decline (4). Where the price sits in that cycle frames everything below.

Tamilnad Mercantile Bank Ltd trades at ₹882, in a confirmed uptrend and 46 weeks into that stage. That is +20.8% against its own 200-day average. It sits at 88% of a 52-week range of ₹496 to ₹932. On relative strength it has been ahead of the NIFTY 500 on a trailing-13-week view for 13 straight weeks.

Today the stock is in a confirmed uptrend — week 46 of stage 2, confirmed. At ₹882 it trades +20.8% versus its 200-day average and sits at 88% of its 52-week range (₹496–₹932).

Against the market, two honest reads. Cumulative: over the last 4.0 years the stock moved +79% while the NIFTY 500 moved +47% — ahead of the index over the full window. Recent form: on a trailing-13-week view the stock has been ahead for 13 straight weeks — the ribbon below is that same metric, week by week.

What would end the trend, mechanically: two Friday closes in a row below the 200-day line. That is the exit rule — no debates.

Story check

Tamilnad Mercantile Bank Ltd's story is not scored yet against the markers our research file set on 22 August 2026. Where it sits in its own cycle: Mid expansion in earnings with valuation at the upper end of the supplied P/BV curve.. Our fortnightly research layers last read it on 22 August 2026.

Our read, 22 August 2026. TMB has a rising earnings and asset-quality track record, but the stock now needs delivery on the upgraded lending and return targets rather than another valuation rerating.

From the numbers. For a lender, P/BV versus ROE is the relevant valuation read. The supplied curve places P/BV at its historical peak even though the point-in-time cycle snapshot is at 81st percentile; this discrepancy warrants valuation…

From the price. Price stage 2, week 46 — above its 200-day line, relative strength falling.

From the research. TMB has a rising earnings and asset-quality track record, but the stock now needs delivery on the upgraded lending and return targets rather than another valuation rerating.

🚨 Where they disagree. For a lender, P/BV versus ROE is the relevant valuation read. The supplied curve places P/BV at its historical peak even though the point-in-time cycle snapshot is at 81st percentile; this discrepancy warrants valuation discipline rather than a claim of cheapness.

What is proven. TMB has a rising earnings and asset-quality track record, but the stock now needs delivery on the upgraded lending and return targets rather than another valuation rerating.

What is not proven yet. Two consecutive quarters of worsening reported asset quality together with a miss on the FY27 advances path would break the quality-and-growth premise.

🚨 What would change our mind. Two consecutive quarters of worsening reported asset quality together with a miss on the FY27 advances path would break the quality-and-growth premise.

Layer 1 read, 22 August 2026 — KEEP. Twelve straight quarters of rising profit and falling bad loans — but gold did the work and the re-rating is spent. TMB has done the two things a bank has to do at the same time, every quarter, for three years: profit went from Rs 274 crore to Rs 412 crore and bad loans went from 1.70% down to 0.69%, with profit growth speeding up (5%, 14%, 28%, 35%). Management raised every one of its full-year targets after this print. The catch is where the growth came from: gold loans are 47% of the book, and when gold rises the same pledged jewellery supports a bigger loan — so the loan book, the yield and the bad-loan ratio all improve without one extra borrower, and management itself says growth must now switch to being volume-driven. The stock is at 1.32 times book value, which is genuinely cheap in absolute…

What would change Layer 1’s mind. Two consecutive quarters of WORSENING reported bad loans together with advances falling short of the 21-22% FY27 path — that is the specific pair that breaks the quality-and-growth premise and would flip this from hold to exit. The sharper near-term version, given that gold collateral is doing the work: a fall in the gold price beyond management’s own stated 20% tolerance, or the Rs 37 crore of small-business slippages failing to resolve in Q2 as promised.

Layer 2 read, 22 August 2026 — ADVANCE. Advance the held bank because profit and bad loans improve into a turning sector, but do not call it cheap. TMB's profit rose while gross and net bad loans fell, giving the hold case direct stock evidence. The external sector timeline is TURNING_AROUND and the capital-cycle atom is an IDEAL_TROUGH_SETUP. The new loss rules and concentrated gold book cap confidence, but they have not yet reversed reported asset quality.

What would change Layer 2’s mind. Two consecutive quarters of worsening GNPA and NNPA together with advances growth below management's 21% lower guide would flip ADVANCE to DROP.

Layer 3 read, 22 August 2026 — DEPLOY. Strong bank delivery survives the risk check, but gold concentration and weak disclosures cap the size. Gold loans are 47% of the book and management's stated stress cushion narrowed from 25% to 20%; targeted search therefore confirms, rather than clears, Timeline R1. The ECL reserve work reduces near-term pressure, but unreconciled capital disclosures keep management on WATCHLIST.

What would change Layer 3’s mind. A second quarter of worsening GNPA or NNPA together with failure to resolve the capital-adequacy bridge would flip DEPLOY to DROP.

CIO read, 22 August 2026 — RETAIN. HELD (defended slot) · forward-asymmetry 57/100 · CONTESTED. Profit rose from Rs 274 crore to Rs 412 crore while gross bad loans fell from 1.70% to 0.69%. The problem is price: price-to-book is at the 81st percentile and the re-rating is marked spent; the positive 12.5-point sustain gap therefore needs a fight, not an automatic keep.

The test written in advance. Two consecutive quarters of worsening reported asset quality together with a miss on the FY27 advances path would break the quality-and-growth premise. — the thesis as written as stated by the next result.

The test written in advance. Gold-loan concentration and stress-buffer risk — Gold-loan concentration and stress-buffer risk A gold-price fall beyond management’s stated cushion or a rise in gold-linked stress indicators. by the next result.

The test written in advance. Disclosure reconciliation risk — Disclosure reconciliation risk A further inconsistent disclosure or capital adequacy below the latest stated level. by the next result.

🚨 What the surface reading misses. The surface reading is: A high P/BV percentile suggests valuation risk. The research reads it further: For a lender, P/BV must be read against reported ROE and asset quality rather than PE or operating margin.

🚨 What the surface reading misses. The surface reading is: Lower NPA ratios suggest improving credit quality. The research reads it further: The trend matters because lower credit stress can support reported profitability, though concentration can still reverse it.

Lever 2 · Value-added mix — BUILDING. Deposit mobilisation and the latest pricing mix supported the reported margin outcome. What proves it keeps working: Funding and pricing mix. It stops working if Deposit cost rises without an offsetting increase in advance yield.

Lever 16 · Asset quality — BUILDING. Lower reported GNPA and NNPA can keep credit costs contained if the trend persists. What proves it keeps working: Asset-quality runway. It stops working if Reported GNPA or NNPA rises for two consecutive quarters.

Sources: our stock research file (22 August 2026) · quarterly results through Jun 26 · the company’s own earnings calls. The story check is re-scored every results season; the record below never changes.

Revenue For a bank, revenue is everything the franchise earns — interest on the loan book plus fee and other income.

Tamilnad Mercantile Bank Ltd reported ₹1,662 Cr of income in the Jun 26 quarter, +19.9% year on year. That is the 12th straight quarter of year-on-year growth. Over 8 years it has compounded at 7.6% a year. The last full year, FY26, came in at ₹5,819 Cr. The last four reported quarters add to ₹6,094 Cr.

Why this happened. Management reported MSME growth and quarterly additions while describing LOS, HR and CMC investments as execution support. The driver works only if growth continues without a credit-quality reversal.

FY26 revenue came in at ₹5,819 Cr (+10.0% on the year), capping 8 years at 7.6% compound. The latest quarter (Jun 26) printed ₹1,662 Cr, +19.9% year on year — the 12th consecutive quarter of year-over-year growth.

Pace check: the last four quarters averaged +12.9% growth against the decade's 7.6% — the current year is running faster than its own long-run rate.

Acceleration check: trailing-twelve-month revenue grew +12.9% over the last 4 quarters against +10.7%/yr over the last 8 — stabilising; TTM profit +20.5% vs +14.8%/yr — accelerating.

FY26-Q4. revenue ₹1,550 Cr and profit ₹374 Cr as reported.

FY27-Q1. revenue ₹1,662 Cr and profit ₹412 Cr as reported.

Why-sources: our stock research file (22 August 2026) and the company’s own results for those quarters.

Net margin Net margin — what the bank keeps of every ₹100 of revenue after every cost, provision and tax. It is the cleanest single margin we can read for a lender.

Tamilnad Mercantile Bank Ltd's net margin is 24.8% in the Jun 26 quarter, +2.8 percentage points against the same quarter a year ago. Across 9 fiscal years the net margin has ranged 6.8% to 25.2%. The current quarter sits inside that band.

Why this happened. The latest call attributes margin improvement to lower deposit cost and higher advance yield. Sequential CASA weakness remains the constraint to monitor.

The latest quarter's net margin is 24.8%, +2.8 pp against the same quarter a year ago. Across 9 fiscal years the net margin has ranged 6.8%–25.2%.

Why: the numbers show the net margin move clearly, but the cost lines behind it sit below what we hold — so we state the move without inventing its driver.

FY26-Q4. revenue ₹1,550 Cr and profit ₹374 Cr as reported.

FY27-Q1. revenue ₹1,662 Cr and profit ₹412 Cr as reported.

Why-sources: our stock research file (22 August 2026) and the company’s own results for those quarters.

Net profit Net profit is what survives every cost, interest and tax — the number EPS, dividends and book value all grow from.

Tamilnad Mercantile Bank Ltd earned ₹412 Cr of net profit in the Jun 26 quarter, +35.1% year on year. It is the 9th consecutive quarter of growth. Full-year FY26 profit was ₹1,338 Cr. The 8-year compound rate is 25.2%. That is 24.8% of the quarter's revenue. The same quarter a year earlier earned ₹305 Cr.

Jun 26 profit was ₹412 Cr, +35.1% year on year — the 9th consecutive quarter of growth. On the full year, FY26 printed ₹1,338 Cr (+13.1%), and the 8-year compound rate is 25.2%.

Why profit moved: revenue contributed +19.9% and the margin +2.8 pp — the quarter was margin-led: most of the profit growth came from keeping more of each sale.

Pace comparison, last four quarters: profit +20.6% vs revenue +12.9%. Profit is growing faster than sales — fixed costs are being spread over a bigger base, and each extra rupee of revenue drops more to the bottom line.

FY26-Q4. revenue ₹1,550 Cr and profit ₹374 Cr as reported.

FY27-Q1. revenue ₹1,662 Cr and profit ₹412 Cr as reported.

Why-sources: our stock research file (22 August 2026) and the company’s own results for those quarters.

Asset quality — the ladder Gross NPA is the slice of the loan book where repayments have stopped. Net NPA is what remains after the money already set aside against those loans. Falling is healing; rising is damage arriving.

Tamilnad Mercantile Bank Ltd's gross NPA is 0.69% of the loan book in Jun 26, down from 1.22% a year ago. Net of provisions already set aside, 0.17% remains. That is the 11th straight quarter of improvement. Across the 12 quarters held here the book has ranged 0.69% to 1.70%.

Why this happened. The latest quarter’s reported asset-quality ratios were below the year-ago levels, and management cited high collateral and provisioning coverage.

Jun 26: gross NPA at 0.69% and net NPA at 0.17%, against 1.22% / 0.33% a year ago. Over the 12 quarters we hold, the book's worst reading was 1.70% and its best is 0.69% — which is the current print. The ladder has now improved for 11 consecutive quarters.

The synthesis: profit growth at a bank is only as good as the book behind it, and this book is healing on a multi-quarter streak. A note on depth: quarterly provisioning detail is not in our numbers yet, so this ladder reads levels and trend, not the cost of the cleanup.

Why the ladder moved: recoveries, write-offs and slippages each play a part, and that split sits below what we hold — the numbers show the healing; the driver mix does not travel with them.

The loan book We read the loan book through revenue — when the book grows, revenue grows with it. It is a rough proxy, and we say so: rate moves and fee swings can shift it a few points in any one year.

Tamilnad Mercantile Bank Ltd's revenue grew +10.0% in FY26 to ₹5,819 Cr, so the book is growing. The latest quarter ran +19.9% year on year. The net margin on that income is 24.8%, +2.8 percentage points against a year ago. Interest income is a proxy for the book; rate moves can shift it a few points in any one year.

FY26 revenue was ₹5,819 Cr, +10.0% on the year, and the latest quarter ran +19.9% year on year. The net margin on that revenue is 24.8% this quarter (+2.8 pp YoY) — growth with a widening margin on it.

The synthesis: a lender compounds when the book grows while the margin holds and the loan book stays clean — gross NPA is the loan-quality read we carry here.

Returns on equity and assets Two numbers rate a bank: ROE — what it earns on shareholder money — and ROA — what it earns on everything it deploys. ROE above ~13–15% earns its keep; below that, growth builds book slowly.

Tamilnad Mercantile Bank Ltd earns a return on equity of 14% in FY26. Its trough over the ladder below was 7% in FY18. On the asset side every ₹100 of the balance sheet earned about ₹1.96, which is the return before leverage is applied.

FY26 ROE came in at 14%, recovered from a FY18 trough of 7%. On assets, the latest reading is about 1.96% — every ₹100 the bank deploys earns roughly ₹1.96 a year. That clears the bar a bank must beat for its book value to compound.

Why ROE moved: profit compounded 25.2% a year over 8 years while the equity base grew more slowly — earnings recovering faster than book value builds is what lifts ROE off a trough.

Debt

For a bank, borrowings are raw material, not a warning sign — solvency is read through the returns and the loan book. A manufacturer’s debt is a claim against its profits, so the debt-to-equity lens that works everywhere else misleads on a lender and is not applied here.

A manufacturer’s debt is a claim against its profits; a bank’s borrowings are its inventory — money taken in to be lent out. The debt lens that works everywhere else misleads here, so this page does not apply it. The solvency questions for a bank — is the loan book sound, is the equity earning — are read through the loan-book and returns sections above.

Ownership Who owns the stock, quarter by quarter: promoters (the controlling owners), foreign and domestic institutions, and the public. Steady accumulation by people close to the numbers is a signal; a quiet register is also an answer.

Foreign institutions added 3.1 points of Tamilnad Mercantile Bank Ltd over 8 quarters, the biggest move on the register. That takes foreign institutions to 6.7% of the company. Domestic institutions moved −0.8 points over the same window, to 2.0%. The register is read on the four disclosed classes only; nothing is inferred between filings.

The register over the last two years — Foreign institutions: +3.1 points over 8 quarters to 6.7%; Domestic institutions: −0.8 points over 8 quarters to 2.0%.

Why the register moved: foreign institutions drove it (+3.1 points), absorbed on the other side by domestic institutions (−0.8 points) — steady accumulation by institutions reading the same numbers this page reads.

Safety line The Z-score estimates how far a company sits from balance-sheet distress — above roughly 3 is safe, below roughly 1.8 is the danger zone. It was built for manufacturers, so it is not applied to banks and lenders.

Tamilnad Mercantile Bank Ltd: the Z-score is omitted — it was built for manufacturers, not banks, and applying it here would be theatre. The Z-score was built for manufacturers and is not applied to banks and lenders, so solvency here is read from the capital and asset-quality lines instead.

The safety line in one sentence: the Z-score is omitted — it was built for manufacturers, not banks, and applying it here would be theatre.

Valuation For a bank we price the book, not the earnings: P/BV is what the market pays for each ₹1 of the bank's net worth. A bank below 1× book is priced below the value of what it owns, net of what it owes.

Tamilnad Mercantile Bank Ltd trades at 1.3× P/BV, about the priciest it has ever traded. Its long-run median P/BV is 1.0×, measured across 3.9 years of weekly readings. This places the multiple against the stock’s own record, and says nothing about what the business is worth.

Today's P/BV of 1.3× is about the priciest it has ever traded, against a long-run median of 1.0× measured over 3.9 years of weekly readings. This is a comparison against the stock's own history — not a claim about what it is worth.

🚨 Why the multiple sits where it does: over the past year book value grew while the price moved +108.0% — the price ran ahead of the book, pushing the multiple up its own range.

The price move, decomposed: over 3y, of the +17.9%/yr price move, ~+13.3%/yr came from book-value growth and ~+4.6 pp from the multiple (expanding). The split is the honest approximate (price return minus book-value growth); it makes the rally itself visible instead of hiding it behind the percentile.

Put together: the multiple is full against its own past, so the story rests on the book-value line underneath it, not the multiple.

What the price assumes This reading works the multiple backwards. It asks one question: what yearly rate of profit growth is a buyer at the market price already paying for? The number is the growth rate that makes eleven years of profit — six years growing, then five fading — add up to that day's market price, once each year is discounted at 11% a year.

Solved at its 24 August 2026 price, Tamilnad Mercantile Bank Ltd was paying for profit growth of about 2.5% a year. Profit itself has compounded 25.2% a year over the past 8 years. Today the market pays 1.3× P/BV, the 98th percentile of its own 4-year range.

What the two numbers say together. The multiple is full against its own past, and the growth the price is paying for is below what this company has actually delivered.

How to hold this number: it is a reading of one day's price, taken on 24 August 2026, not a running figure — every other number on this page, the multiple included, is read off the live quote as of 28 September 2026. A higher price is paying for more growth and a lower price for less, so it moves whenever the price does, and this page does not restate it between measurements.

Stage: Consistent Every business sits somewhere on a fundamental arc, and this page names the spot before anything else. The last twelve quarters of revenue, profit and EPS growth — plus the return the business earns on its capital — are read as curves: Deteriorating (the curves are falling), Turning around (a trough has just formed and the last few quarters lift off it), Improving (the climb off the trough is sustained), Consistent (steadily positive with healthy returns), Topping out (still high but decelerating from the peak). When the curves genuinely disagree the read is Mixed; too little history is No read. CAGR (compound annual growth rate) is the smooth yearly pace that turns the starting value into the latest one — the fairest way to compare growth across different time spans. Read the columns together: if the 1-year number towers over the 10-year, recent growth is running hotter than the long-run trend. A dash means that window is not held, or the base year was a loss (where a growth rate is not meaningful).

Tamilnad Mercantile Bank Ltd reads as consistent on its fundamental arc. Consistent — revenue, profit and EPS growth have stayed positive through the window, with ROE at 13.2% and holding. The read is built from 12 quarters across 4 curves, on full evidence.

Why it matters: steady curves with healthy returns are the compounding setup — the risk is the price, not the business.

4-Factor Sector Score

66.2/100 — rank 1 of 8 in Private Banks · 100% evidence confidence

Tamilnad Mercantile Bank Ltd scores 66.2 out of 100 against the 8 companies it is compared with in Private Banks, ranking 1. Balanced evidence: keep at normal research priority and require another comparable period before raising conviction.

The four contributions add to the total exactly: 18.4 + 23 + 10.7 + 14.1 = 66.2. This is the SAME number shown on the sector comparison — it is computed once, for the whole peer set, and read here.

What would change it: The read weakens if ROA rolls over or gross NPA rises while sector-relative strength deteriorates.

Said versus delivered

What Tamilnad Mercantile Bank Ltd's management promised, set against what actually arrived — 4 tracked promises on the record. Read straight from the company’s own earnings calls. A promise that slipped stays on this page after it is met.

Capital Adequacy Falls Without Reconciliation · 27 July 2026. In Apr 2026, management reported capital adequacy of 33.73%, while in Jul 2026 it reported 22.16%. This 11.57 percentage-point decline is material to growth capacity and valuation, yet the latest call did not explain the change in capital or risk-weighted assets.

ECL Requirement Increased and Immediate Provisioning Deferred · 27 July 2026. Management's stated ECL impact increased from INR279 crores in Apr 2026 to INR324 crores as of June 30 in Jul 2026, with no reconciliation for the higher requirement. Earlier management said its INR250 crore contingency provision should largely handle the impact and that it could take the provision immediately, whereas the latest call says INR48 crores remains and there is no immediate pressure to provide it all now.

Gold Price Stress Cushion Reduced · 27 July 2026. In Apr 2026, management said the gold portfolio could absorb a 25% reduction in gold prices, but in Jul 2026 it stated that the portfolio could withstand only a 20% reduction. The lower stated cushion materially worsens the downside risk assessment for the bank's largest stated growth portfolio, and the latest call did not explain the change.

Shareholders' Funds Metric Reverses · 27 July 2026. In Apr 2026, management said shareholder funds were above INR10,000 crores, while in Jul 2026 it reported shareholders' funds of only INR3,125 crores. The latest figure is not reconciled with the earlier capital figure or with the higher book value per share, creating a material inconsistency for capital and valuation analysis.

Every quote above is taken word for word from the company’s own earnings calls.

Frequently asked questions