Tamilnad Mercantile Bank Limited (TMB) AI Stock Analysis

• Market Cap: ₹96.41B
• Dividend Yield: 2.15%
• Average Volume (3M): 14.43K
• Price to Earnings (P/E): 7.9
• Beta (1Y): 0.46
• Revenue Growth: 7.08%
• EPS Growth: 7.69%
• Country: IN
• Employees: 4,601
• Sector: Financial
• Sector Strength: 70
• Industry: Banks - Regional
• EPS (TTM): 20.05
• Shares Outstanding: 158,351,460
• 10 Day Avg. Volume: 9,091
• 30 Day Avg. Volume: 14,426
• PEG Ratio: 0.54
• Price to Book (P/B): 0.73
• Price to Sales (P/S): 1.08
• P/FCF Ratio: 4.02
• Enterprise Value/Market Cap: N/A
• Enterprise Value/Revenue: N/A
• Enterprise Value/Gross Profit: N/A
• Enterprise Value/Ebitda: N/A
• 1Y Price Target: N/A
• Price Target Upside: N/A
• Rating Consensus: N/A
• Number of Analyst Covering: 0
• EPS Forecast (FY): N/A
• Revenue Forecast (FY): N/A

• Rating: 79 Outperform
• Price Target: ₹697.00 ▲(59.30% Upside)

Tamilnad Mercantile Bank Limited has a strong financial foundation with consistent growth and low leverage. The stock's technical indicators show bullish momentum, although caution is warranted due to a high RSI. Its low P/E ratio and reasonable dividend yield make it an attractive investment, contributing to a solid overall score.

Positive Factors

Consistent revenue & net income growth

Sustained revenue and net income growth provides a durable earnings base that supports reinvestment, provisioning and shareholder returns. Steady top-line expansion reduces reliance on one-off gains and underpins predictable net interest income and fee generation over a multi-quarter horizon.

Strong balance sheet, low leverage

Low leverage and a strong equity ratio give the bank financial flexibility to absorb shocks, support loan growth, and fund strategic initiatives without urgent external financing. This structural strength lowers solvency risk and enhances long-term stability versus higher-levered peers.

Improving free cash flow generation

Rising free cash flow strengthens the bank's ability to internally fund lending, technology investments and dividends while retaining buffers for provisions. Robust cash generation reduces dependence on wholesale funding and improves resilience across business cycles over several quarters.

Negative Factors

Volatile operating cash flows historically

Intermittent operating cash flow volatility complicates multi-quarter planning and can force more conservative capital decisions or higher reliance on short-term funding in weak periods. Persistent swings may constrain consistent loan growth or discretionary spending over the medium term.

Conservative capital allocation limits deployment

Holding excess cash and low-risk investments preserves capital but may depress return on equity and slow loan-book expansion. Over time, under-deployment of capital can limit earnings leverage and market share gains versus peers that deploy more aggressively into higher-yield lending.

High reliance on net interest income

A business model concentrated on net interest income makes long-term profitability sensitive to loan demand, deposit costs and asset quality. Adverse shifts in NPAs or deposit pricing can compress margins and elevate credit costs, impacting sustainable earnings power over multiple quarters.

Tamilnad Mercantile Bank Limited Business Overview & Revenue Model

Company Description

Tamilnad Mercantile Bank Limited provides banking and financial products and services in India. It operates through Treasury, Corporate and Wholesale Banking, Retail Banking, and Other Banking Operations segments. The company offers savings, recurring, term deposit, and current accounts; debit and credit cards; and demat and equity trading account, POS terminal, e-tax payment, online bill payment, mutual fund, insurance, mutual fund, sovereign gold bond scheme, money transfer, forex, treasury, and Internet and mobile banking services. It also provides home, car, two-wheeler, personal, house rent, pension, doctor, education, jewel, pension, NRI, commercial vehicle, traders and service, MSME, rice and dhall mill, doctor, and Mahalir loans, as well as loans against properties and sovereign gold bonds; vehicle finance for educational institutions; secured overdraft facilities; and microenterprise, pharma, and channel finance. The company was formerly known as The Nadar Bank Ltd. and changed its name to Tamilnad Mercantile Bank Limited on November 26, 1962. Tamilnad Mercantile Bank Limited was incorporated in 1921 and is headquartered in Thoothukudi, India.

How the Company Makes Money

TMB generates revenue primarily through the interest income earned from lending activities. The bank extends various types of loans, including personal loans, home loans, agricultural loans, and business loans, which carry interest rates. Additionally, TMB earns money through fees and commissions charged for services such as account maintenance, fund transfers, and other financial products. The bank also benefits from investment income, which includes returns on investments in government securities and other financial instruments. Furthermore, TMB has established partnerships with various financial institutions and fintech companies to enhance its service offerings and reach a broader customer base, contributing to its overall revenue streams.

Tamilnad Mercantile Bank Limited Financial Statement Overview

Summary

Tamilnad Mercantile Bank Limited displays a strong financial performance with consistent revenue and net income growth. The balance sheet is solid with low leverage, and cash flow management has improved despite some volatility.

Income Statement

The income statement shows a strong performance with consistent revenue and net income growth over the years. The gross profit margin and net profit margin are robust, indicating efficient cost management and profitability. The bank has maintained a healthy EBIT and EBITDA margin, reflecting operational efficiency. Revenue growth has been steady, demonstrating the bank's ability to expand its business.

Balance Sheet

The balance sheet reflects a solid financial position with a substantial increase in stockholders' equity and total assets over the years. The debt-to-equity ratio is low, indicating prudent financial management and low leverage, which reduces financial risk. The equity ratio is strong, further highlighting the stability of the bank’s financial structure. However, the consistently high levels of cash and investments relative to debt suggest conservative capital allocation.

Cash Flow

The cash flow analysis reveals a mixed performance with some volatility in operating cash flow. However, the bank has shown significant improvement in free cash flow, indicating better capital management and increased cash generation from operations. The operating cash flow to net income ratio and free cash flow to net income ratio suggest robust cash flow relative to earnings, although fluctuations in past years warrant attention.

Breakdown	TTM	Dec 2025	Dec 2024	Dec 2023	Dec 2022	Dec 2021
Income Statement
Total Revenue	62.44B	61.42B	54.93B	47.10B	46.46B	42.53B
Gross Profit	31.61B	31.51B	27.96B	27.23B	26.27B	21.82B
EBITDA	15.95B	16.61B	14.69B	10.83B	8.55B	6.32B
Net Income	12.00B	11.83B	10.72B	10.29B	8.22B	6.03B
Balance Sheet
Total Assets	674.78B	664.50B	615.52B	578.95B	528.58B	475.27B
Cash, Cash Equivalents and Short-Term Investments	40.91B	44.08B	35.68B	35.82B	38.52B	27.05B
Total Debt	5.35B	5.00B	5.00B	5.25B	0.00	0.00
Total Liabilities	581.50B	574.41B	536.31B	509.67B	475.23B	429.47B
Stockholders Equity	93.28B	90.09B	79.21B	69.28B	53.36B	45.80B
Cash Flow
Free Cash Flow	0.00	16.45B	-7.11B	-13.59B	12.18B	-7.08B
Operating Cash Flow	0.00	17.50B	-6.11B	-12.70B	13.25B	-6.70B
Investing Cash Flow	0.00	-992.10M	-1.00B	-886.00M	-1.07B	-371.11M
Financing Cash Flow	0.00	-9.60B	6.97B	39.22B	38.91B	38.21B

Tamilnad Mercantile Bank Limited Technical Analysis

• Technical Analysis Sentiment: Positive
• Last Price: 437.55
• 50DMA: Positive
• 100DMA: Positive
• 200DMA: Positive
• MACD: Negative
• RSI: Negative
• STOCH: Negative

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For IN:TMB, the sentiment is Positive. The current price of 437.55 is below the 20-day moving average (MA) of 564.15, below the 50-day MA of 533.56, and below the 200-day MA of 464.84, indicating a bullish trend. The MACD of 15.88 indicates Negative momentum. The RSI at 74.12 is Negative, neither overbought nor oversold. The STOCH value of 85.27 is Negative, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for IN:TMB.

Tamilnad Mercantile Bank Limited Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
TMB	79 Outperform	₹96.41B	7.94	―	2.15%	7.08%	7.69%
SOUTHBANK	77 Outperform	₹98.35B	7.07	―	1.05%	8.09%	2.68%
KTKBANK	70 Outperform	₹68.82B	5.99	―	2.42%	―	―
DCBBANK	68 Neutral	₹64.22B	8.97	―	0.76%	21.44%	17.14%
Sector *	68 Neutral	$18.00B	11.42	9.92%	3.81%	9.73%	1.22%
CSBBANK	58 Neutral	₹76.36B	12.28	―	―	32.90%	12.28%
UTKARSHBNK	45 Neutral	₹24.20B	-2.34	―	2.82%	2.35%	-261.81%

Tamilnad Mercantile Bank Limited Corporate Events

Tamilnad Mercantile Bank Files SEBI Dematerialisation Compliance Certificate for Q3 FY2025-26

Tamilnad Mercantile Bank Limited has notified the stock exchanges that it has received and submitted the requisite certificate under Regulation 74(5) of the SEBI (Depositories and Participants) Regulations, 2018 for the quarter ended 31 December 2025, as issued by its Registrar and Share Transfer Agent, MUFG Intime India Private Limited. The registrar has confirmed that all securities received for dematerialisation during the quarter were duly processed, listed on the relevant stock exchanges, and that the corresponding physical certificates were verified, mutilated, cancelled, and replaced in the register of members with the depositories as the registered owners within prescribed timelines, underscoring the bank’s compliance with securities dematerialisation and listing norms.

Tamilnad Mercantile Bank Initiates Postal Ballot for Key Resolutions

Tamilnad Mercantile Bank Limited has announced a postal ballot and e-voting process to seek approval from its members on several business resolutions, including the appointment of non-executive directors and alterations to the Articles of Association. This move is part of the bank’s compliance with regulatory requirements and aims to engage shareholders in key decision-making processes, potentially impacting its governance structure and strategic direction.

Tamilnad Mercantile Bank Schedules Investor Engagement Meeting

Tamilnad Mercantile Bank Limited has announced a virtual meeting with high net-worth individuals scheduled for November 17, 2025, as part of its engagement with analysts and investors. This meeting is in compliance with SEBI regulations, and no unpublished price-sensitive information will be disclosed, ensuring transparency and maintaining regulatory standards.