Tamilnad Mercantile Bank Limited (TMB)
Micro CapFinancial Services stocks · Micro cap · NSE
Tamilnad Mercantile Bank (TMB) is a 104-year-old Indian private sector bank with a focus on secured lending across Retail, Agriculture, and MSME segments. The bank is undergoing strategic transformation under new ex-SBI leadership, emphasizing digital revamp, branch expansion, and asset quality improvement.
One read, four checks
75+ is strong, 60-74 is usable, 45-59 is mixed, and below 45 needs caution. These are research lenses, not buy/sell instructions.
Mixed fundamentals, while price trend supports entry. This looks more like momentum/speculation than a clean fundamental investment setup.
Fundamental lens: valuation, quality, growth, balance sheet, and cash flow.
low confidence · 0/0 claims checked
Timing lens: price trend and sector relative strength.
Rolling lens: recent quarterly delivery, not the latest single-result score.
Quarter ended 30 Jun 2026
Excellent · 75/100Rev +20% YoY · PAT +35% YoY · +7% QoQ · operating leverage
| Metric | This quarter | YoY | QoQ |
|---|---|---|---|
| Revenue | ₹1,662 Cr | +19.9% | +7.2% |
| EBITDA | NDF | NDF | NDF |
| Operating margin | NDF | NDF | NDF |
| PAT | ₹412 Cr | +35.1% | +10.2% |
| PAT margin | 24.8% | +278 bps | +66 bps |
NDF means not disclosed in the current structured filing feed. It is intentionally not treated as zero.
Business & thesis
Growth engines, tailwinds/headwinds, and risk radar from management commentary
Business & thesis
Growth engines, tailwinds/headwinds, and risk radar from management commentary
Where growth can come from, and what can break the case
TMB reports strong FY26 performance with 20.32% YoY advances growth, 14.94% YoY deposits growth, and record Q4FY26 PAT of ₹373.65 Cr. Asset quality improved significantly with GNPA at 0.73% and NNPA at 0.18%.
The investment thesis remains intact, driven by new ex-SBI leadership initiating strategic transformation. FY26 saw strong advances and deposit growth, significant asset quality improvement to lowest GNPA/NNPA in 40 quarters, and record Q4 PAT. Management exceeded all Q4FY26 guidance KPIs, suggesting a credible rerating path.
CASA Rebuild
On TrackTransaction Banking/NRI/Elite programs driving sequential gains; CASA Ratio 28.14% (+170 bps YoY in FY26).
MSME Acceleration
On TrackMSME Architecture redesigned with CMCs, BRE/LMS, and reduced TAT; MSME portfolio is 29.10% of advances.
Geographic Expansion
On Track44 new branches opened in FY26, 15 in Non-TN; 60 new branches proposed for FY27, with 20 in Non-TN.
Digital Transformation
On Track96.85% transactions through digital channels (FY26), up 1.17% YoY; Digital Revamp Phase-I completed, Phase-II by Q3 FY27.
Branch Network Expansion
44 new branches opened in FY26, bringing total to 622. 60 new branches proposed for FY27, with 20 in Non-TN.
Leadership Inflection
New MD & CEO (Aug '24), CFO (Mar '25), ED (Sept '24) from ex-SBI leadership driving strategic transformation.
Improved Asset Quality
Consistent improvement in GNPA/NNPA, reflecting stronger underwriting and recovery trends; Lowest GNPA% in 40 quarters.
Digital Operations Leverage
Approximately 97% digital transactions, leveraging IT capabilities with Oracle Fusion Cloud and Finacle CBS.
Gold Price Shock
Current Gold Loan portfolio LTV is ~53%; portfolio stress tested daily. Management states portfolio can absorb 25% gold price reduction.
CASA Competition
Focus on transaction banking, payroll management, and merchant acquisition to mitigate competition.
ECL/LCR Impact
ECL requires ₹279 Cr of additional provisions; current Covid provision of ₹250 Cr largely covers the impact. LCR expected at 143% with revised guidelines.
Legal/Regulatory Issues
Show cause notices from ED regarding share transfers/bonus shares (2007) are at appeal/court challenge stage. A 38% share dispute since mid-1990s affects ownership, not operations.
Management accountability
What management said, and what results must prove
Management accountability
What management said, and what results must prove
What management said, and what results must prove
Issuer guidance and extracted claims are tracked against later reported outcomes. Treat these as management statements, not IndiaPulse forecasts.
Annual (YoY) comparisons are crucial for assessing overall growth and profitability trends for a bank. Quarterly (QoQ) comparisons are important to track sequential momentum in advances, deposits, NIM, and asset quality improvements under new leadership.
Advances Growth (YoY)
Exceeded guidance of 16-17%Advances ₹53,379 Cr, +20.32% YoY (FY26); Highest Advances growth recorded in the past 40 quarters.
Deposits Growth (YoY)
Exceeded guidance of 13-13.5%Deposits ₹61,712 Cr, +14.94% YoY (FY26); Highest Deposit growth recorded in the past 39 quarters.
Net Interest Margin (NIM)
Exceeded guidance of 3.90-3.95%NIM FY26: 3.98% (vs 4.07% in FY25); Q4FY26 NIM: 4.18%.
Gross Non-Performing Assets (GNPA)
Exceeded guidance of Less than 1%GNPA 0.73% (FY26), ↓ 52 bps from FY25; Lowest GNPA% in the past 40 quarters.
Long-term Institutional Stewardship
MD & CEO states, 'At Tamilnad Mercantile Bank, we do not manage quarters. We steward a 104-year institution.'
Tech-Led Scalability
Deploying Oracle, AI, and BRE/LMS to amplify human touch, enabling bankers to serve more customers better.
Justified Rerating
Management believes Q4 ROA of 2.05% implies 18-36% share price appreciation at peer-parity multiples, an 'arithmetical inevitability'.
Numbers and claims to verify in the next filings
| Checkpoint | Current evidence | What to verify next |
|---|---|---|
| CASA Ratio | 28.14% (FY26) | Continued sequential gains in CASA share, targeting 15%+ growth. |
| MSME Growth | 29.10% of advances (FY26) | Acceleration in MSME growth, targeting 15-20% growth, driven by new architecture. |
| Net Interest Margin (NIM) | 4.18% (Q4FY26) | Stability or expansion of NIM, with management targeting 3.80-3.95%. |
| Branch Expansion | 622 branches (FY26) | Commissioning of 60 new branches in FY27, with 20 in Non-Tamil Nadu. |
Verification checkpoints are IndiaPulse research interpretation, not investment advice.
Trend score and candlestick chart
85Strong Bullfull bull SMA stack · SMA20 +5.6% / mo · MACD + · near 52W high
Technical chart
TMBdaily · 1Y · AUTO+43.5%Daily technical trend read
Bullish setupTrend is constructive — long-term uptrend intact. RSI 64.
- Price > SMA20 > SMA50 > SMA200 — full bullish stack.
- SMA20 rising (~5.3% over last month) — short-term momentum positive.
- RSI(14) at 64 — rising, no extreme reading.
- MACD above signal, histogram expanding — bullish momentum building.
- Within 3% of 52-week high — testing resistance.
Mechanical read from the price + indicator series above. Not a recommendation — technical setups can reverse without warning, especially around earnings and macro events.
Valuation & score drivers
U-Score 50 · FAIR VALUE · pillar breakdown, sector model, fair-value anchor
Valuation & score drivers
U-Score 50 · FAIR VALUE · pillar breakdown, sector model, fair-value anchor
Fundamental score breakdown
FAIR VALUEWhy this score?
Top U-Score contributors and drags from the latest stored fundamentals.
Positive drivers
- Fair-value margin of safety is positive at 63.2%.
- Valuation contributes 22/30 to the score.
- Growth contributes 14/25 to the score.
Main drags
- Penalty bucket subtracts 1 points.
- Cash flow is weaker at 2/10; verify the latest quarterly trend.
- Quality is weaker at 6/20; verify the latest quarterly trend.
Bank valuation: P/B adjusted for ROE and asset quality
Banks are balance-sheet businesses, so book value quality matters more than simple earnings multiples.
Stored run vs live recompute
This shows the stored score trend when snapshots exist, and also compares the latest stored nightly score with a live recompute from current fundamentals and price.
Score history
12 stored score snapshots. Latest stored move: -2 points.
Factor attribution
Modelled fair value
Trust score
Does management behaviour match later outcomes? Claim delivery, forensic breakdown, evidence depth
Trust score
Does management behaviour match later outcomes? Claim delivery, forensic breakdown, evidence depth
Trust asks: does management behaviour match later outcomes? Higher is better, but confidence and evidence depth matter as much as the number.
Mixed Trust: Claim history is still being built. It ranks around the 42nd percentile of the scored universe and 57th percentile within Financial Services. Main check: cash conversion is weak at 40/100.
Healthy Trust Lite: Promoter pledge is zero. Key concern: Operating cash flow is negative at ₹-101 Cr.
Usable, but needs evidence. Treat guidance with a margin of safety.
overall median 67 · Financial Services: 57th pctile, median 62 · Micro: 25th pctile, median 73
80 documents have extracted text, but claim history is not strong enough yet.
0 claims extracted · No contradicted claim yet
How to read this Trust Score
Mixed Trust · low confidenceRead Trust alongside U-Score, result consistency, and technical trend. A cheap stock with weak Trust needs a larger margin of safety; a high Trust score does not make an expensive stock attractive by itself.
Forensic breakdown
Read low sub-scores as due-diligence warnings, not automatic sell signals.
Trust positives
- ▸Promoter pledge is zero.
- ▸Debt/equity is 0.01.
- ▸4/4 latest quarters had positive YoY revenue growth.
- ▸4/4 latest quarters had positive YoY PAT growth.
Trust risks
- ▸Operating cash flow is negative at ₹-101 Cr.
- ▸ROCE is low at 7.5%.
Trust Lite uses financial behaviour only. Prefer claim-tested Trust when enough concall claims have later outcomes.
Financials
Full fundamentals table and 10-year revenue / profit / ROE history
Financials
Full fundamentals table and 10-year revenue / profit / ROE history
Fundamentals
Valuation
- P/E
- 10.20
- P/B
- 1.40
- EV/EBITDA
- —
- Market Cap
- 14765.00Cr
Profitability
- ROE
- 14.00%
- ROCE
- 7.51%
- ROA
- 1.92%
- Dividend Y
- 1.34%
Growth (CAGR)
- Revenue 5Y
- 10.00%
- EPS 5Y
- 17.00%
- Revenue 3Y
- 13.00%
- EPS 3Y
- 9.00%
Balance Sheet
- Debt/Equity
- 0.01
- Interest Coverage
- —
- Altman Z
- 2.10
- Book Value
- 667.00
Cash Flow
- FCF Yield
- —
- FCF Positive Y
- 3/5
- OCF
- -101.00 Cr
- EPS TTM
- 91.21
Shareholding
- Promoter Hold
- —
- Promoter Pledge
- 0.00%
- Momentum 52W
- 97%
Financial History
Updated 5/9/2026
Revenue
₹ CrNet Profit
₹ CrReturn on Equity
%Peers
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Peers
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Peers
Business-comparable peers in Financial Services — ranked by industry, sub-sector, theme-tag overlap, market cap, and U-Score similarity. Green cells mark the best available peer metric in this table.