CSB Bank Surges 16% in a Vulnerable Market, Hits Fresh 52-week High

The stock passed its preceding 52-week high of Rs 270, touched on November 10, 2020. Shares of CSB Bank, on Friday, rallied 16% cent to a sparkling 52-week high of Rs 273.95 at the BSE in an otherwise vulnerable marketplace on the back of heavy volumes. The stock passed its preceding 52-week high of Rs 270, touched on November 10, 2020. It hit an all-time high stage of Rs 314 on December 5, 2019.

At 02:50 pm, CSB Bank becomes trading 12% higher at Rs 265, against a 1.07% decline within the S&P BSE Sensex. The trading volumes at the counter jumped greater than 10-fold with a blended 3.5 million equity stocks converting hands at the NSE and BSE.

Fairfax-backed CSB Bank had said a sturdy 89% year on year (YoY) leap in net profit at Rs 53.05 crore in the course of the quarter ended December 31, 2020 (Q3FY21) in comparison to Rs 28.14 crore during the identical duration of the remaining 12 months.

For a better part of the current financial year 2020-21 (FY21), the CSB Bank have been extraordinarily selective on its lending portfolio and centered in large part on increasing its Gold Loan business (which is 100% collateralized), leveraging the relaxation within the RBI’s LTV regulation. This is not the only helped revive profitability, but the loan book grew 21.6% YoY to Rs. 13,137 crore (9MFY21).

To maintain the currently discovered boom trend, the management has chalked out the retail-driven growth method and several key appointments were made. Mr. Pralay Mondal (ex- Axis Bank) has taken over the position of the president of the Retail & SME portfolio and
Brokerage organization Ventura Securities expects this new group to develop the retail (with the exception of Gold Loan) and SME books by a CAGR of 44.6% and 17.7% to Rs 7,283 crore and Rs 3,914 crore, respectively, for the duration FY20-FY23.

With the contribution of the high-yielding retail and SME books set to increase, the brokerage organization expects NIMs to expand by 106 bps to 4.4% through FY23. However, as a result of the aggressive increase, plans of including around 500 new branches over the subsequent four years, and hiring within the new verticals, we anticipate the cost to earnings ratio to remain elevated at 51.8% for FY23 (50.4% in Q3FY21), the brokerage organization stated in a stock update.


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