Should you INVEST in CSB Bank?? CLICK to know MORE! COMPANY REVIEW!

Описание: #CSB #Catholicsyrianbank #Bank #Banknifty

Hello, this is Abhishek Aggarwal from Grivaa Capital presenting fundamental and technical analysis on CSB Bank.
A small-cap bank which is spreading its wings and is showing a robust price and volume action on charts and is going to write a stock history in terms of price returns performance in the next couple of months. So, let's understand the business model the SWOT, the strength, the key performance matrix and the results Q4 earnings, and the consolidated numbers of CSB.
The company has a very strong presence in South India especially Kerala and Tamil Nadu with Kerala contributing, almost 50% of its revenues. The company operates in multiple segments - loan against gold, corporate loans, SME loans, and others. But the key category in which it dominates is the loan against Gold category, which contributes, almost 50% of its revenues. The company has exposure across the services sector, agriculture, manufacturing and retail.
The company showed some amazing performance in the consolidated number that it presented a couple of days back. The net interest income in FY 22 showed a remarkable growth of 59%, the profit after tax numbers were just astounding, just out of the world, with year on year growth of 1616%. Can you believe it, a year on year growth of 1616%. There was a significant rise in net interest income. There was also a significant rise in non-net interest income - couple of positives happening for the bank.
What exactly has happened in the last couple of days, what exactly is the scenario for CSB. First, it is the cautious choice of the lending segments that it operates into. The company is increasingly increasing its focus on Gold loans, which is a less vulnerable category. Companies also avoiding the high SME, or MSME portfolio. The proportion of Gold loan has increased tremendously from 26% in 2019 to almost 40% in FY21, so the change in the strategy for growth, and the more focus on the gold loans, has been delivering results for this bank. On the management front, the company has hired several industry veterans at the top level to strengthen its executive and operating team.
The company has also been able to increase the base of low-cost deposit in form of CASA, and that CASA has shown a growth of almost 32%. One of the most important categories to look into because this bank operates into the Kerala region, as we all know that a lot of Kerala people or a lot of Keralites, they go into Middle East countries to work over there. So, company has a very loyal customer base with 25% of its deposit base comes from the NRIs. So, NRI’s contributes significantly to the CASA ratio.
What exactly is the other strength that is delivering positive results for the company is the asset quality has been increasing, there has been decline in the gross non-performing assets from 7.2% in FY17 to 2.7% FY21. So, this dramatic drop in the gross NPA numbers will keep a valuation re-rating for the bank in the next couple of weeks. So, we can conclude in a way, the strong promoter renewed business strategy with new executives on board, strong capital adequacy, coupled with digital technologies implementation to acquire new clients are delivering results for the bank which is showing remarkable growth.
But as we know that every crocodile has some weaknesses. It's not that every bank, or every stock will just have strengths, there are no weaknesses to talk about. And same is the story with CSB. We believe that the deposits are growing at a very faster rate, but because of the pandemic, because of the COVID there will be lesser disbursals happening. The new loan growth is going to be slightly slow because of the pandemic. The company has also given some COVID loans to the manufacturing sectors where the collection is going to be a bit of challenge in this COVID times.

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