Tamilnad Mercantile Bank Ltd — Q1 FY27 earnings call
Summary generated by AI from the official transcript Tamilnad Mercantile Bank Ltd filed with BSE on 30 Jul 2026. Every statement cites a verbatim quote from that document — open any citation to read it. This is a record of what management said, not a recommendation. How we check these summaries
The short read
Tamilnad Mercantile Bank reported Q1 FY27 total business growth of 23%, with net profit at an all-time high of Rs 412 crore, up 34.97% year-on-year, and operating profit of Rs 611 crore, up 48.22%. Net interest margin rose to 4.29%, gross NPA fell to 0.69% and capital adequacy stood at 32.33%. Management raised its full-year guidance for deposit and advances growth and disclosed a reduction in an Enforcement Directorate penalty following an Appellate Tribunal order.
1 statement from this call is not shown because its supporting quote could not be reproduced within our quoting limits. Nothing shown here is affected: every statement on this page carries its verified quote.
Numbers mentioned
Total business growth: 23% (Q1 FY27)
p. 3
“we have delivered first quarter 23% growth business growth, total business growth of 23%, which is way, way higher than the 8.82% 10-year CAGR that this bank has delivered in the past”
Salee S. Nair, page 3 of the filed PDF · View the filing
Net profit: INR412 crores (Q1 FY27)
p. 4
“Net profit is an all-time high, INR412 crores, up 34.97%”
Salee S. Nair, page 4 of the filed PDF · View the filing
Operating profit: INR611 crores (Q1 FY27)
p. 4
“The operating profit is at INR611 crores, up 48.22%”
Salee S. Nair, page 4 of the filed PDF · View the filing
Net interest margin: 4.29% (Q1 FY27)
p. 4
“Net interest margin, the net interest margin is up 45 basis yearon-year, and it is now stands at 4.29% for the quarter”
Salee S. Nair, page 4 of the filed PDF · View the filing
Return on assets: 2.14% (Q1 FY27)
p. 4
“ROA is up 32 basis year-on-year, up from 1.82% to 2.14%”
Salee S. Nair, page 4 of the filed PDF · View the filing
Return on equity: 15.93% (Q1 FY27)
p. 3
“ROE, I think the second quarter when we have crossed 15% this quarter, FY27 first quarter, it is at 15.93%”
Salee S. Nair, page 3 of the filed PDF · View the filing
Gross NPA: 0.69% (Q1 FY27)
p. 4
“GNPA is 0.69%, down 53 basis year-on-year and NNPA is 17 basis, down 16 basis year-on-year”
Salee S. Nair, page 4 of the filed PDF · View the filing
Capital adequacy ratio: 32.33% (Q1 FY27)
p. 3
“the capital adequacy is at 32.33%”
Salee S. Nair, page 3 of the filed PDF · View the filing
Cost-to-income ratio: 39.10% (Q1 FY27)
p. 4
“Cost-to-income ratio well contained, below 40% at 39.10%”
Salee S. Nair, page 4 of the filed PDF · View the filing
Deposits growth: 19.71% (Q1 FY27)
p. 3
“Deposits, 19.71% up to INR64,409 crores”
Salee S. Nair, page 3 of the filed PDF · View the filing
Quarterly EPS: INR25.99 per share (Q1 FY27)
p. 3
“Quarterly EPS is INR25.99 per share”
Salee S. Nair, page 3 of the filed PDF · View the filing
Book value per share: INR667 (Q1 FY27)
p. 6
“Book value per share stands at INR667”
Salee S. Nair, page 6 of the filed PDF · View the filing
ECL additional provision requirement: INR324 crores (as on 30th June 2026)
p. 6
“the cost as on 30th of June '26 is at INR324 crores”
Salee S. Nair, page 6 of the filed PDF · View the filing
IT spending: INR280 crores (FY27)
p. 14
“in the current financial year, it's around INR280 crores that we'll be spending, of which infrastructure will be 21%”
Vincent M D, page 14 of the filed PDF · View the filing
What management said it would do
A record of statements made on the call, in the words management used. Parakho does not forecast, endorse or assess them, and their presence here is not a view on whether they will happen.
Deposit growth — 18% · FY27
stated conditionally by Salee S. Nair
p. 9
“we said we will be 16%. I think we are increasing it by another 2%, right?”
Salee S. Nair, page 9 of the filed PDF · View the filing
Advances growth — 21% to 22% · FY27
stated conditionally by Salee S. Nair
p. 9
“Advances growth, we said 20%. I think we would be upgrading that again by another 2%, 21% to 22% is what we are hoping to end the year”
Salee S. Nair, page 9 of the filed PDF · View the filing
CASA growth — 17% to 18% · FY27
stated firmly by Salee S. Nair
p. 8
“we had said that CASA growth will be 17% to 18%. Certainly, we will stand by that in the, say, the next quarter, the quarter 2 and the rest of the year”
Salee S. Nair, page 8 of the filed PDF · View the filing
Net interest margin — above 4% · FY27
stated conditionally by Salee S. Nair
p. 9
“Net interest margin, 3.90%, I think we should be very well past the 4% mark for the year”
Salee S. Nair, page 9 of the filed PDF · View the filing
Return on assets — over 2% · FY27
stated conditionally by Salee S. Nair
p. 9
“ROA, 1.9% is what we guided. I think it is going to be, again, well over 2%”
Salee S. Nair, page 9 of the filed PDF · View the filing
Return on equity — 15% · FY27
stated firmly by Salee S. Nair
p. 9
“ROE, 15% is now our revised guidance”
Salee S. Nair, page 9 of the filed PDF · View the filing
Gross NPA — below 1% · FY27
stated firmly by Salee S. Nair
p. 9
“the GNPA continues to be below 1%”
Salee S. Nair, page 9 of the filed PDF · View the filing
Cost-to-income ratio — 46% to 47%
stated firmly by Salee S. Nair
p. 17
“I have repeatedly said that we will be in the 46% to 47%. We will defend a 46% to 47% of costto-income ratio.”
Salee S. Nair, page 17 of the filed PDF · View the filing
Branch additions — 60 branches · FY27
stated firmly by Salee S. Nair
p. 10
“our intention is to open 60 branches in this year. And 6 of the branches have already been opened”
Salee S. Nair, page 10 of the filed PDF · View the filing
Gold loan portfolio share — 50%
stated as an aspiration by Salee S. Nair
p. 15
“There we have an informal internal cap to have it limited to 50%.”
Salee S. Nair, page 15 of the filed PDF · View the filing
ECL provisioning completion — FY28
stated conditionally by Salee S. Nair
p. 14
“we are very confident that in the FY27 in FY28 as it kicks in on 1st of April, we will be able to completely provide for that in the year itself”
Salee S. Nair, page 14 of the filed PDF · View the filing
Q&A highlights
Management's answers to analyst questions, in Parakho's words rather than a transcript. Each row names who answered and carries the verbatim quote it was drawn from.
Management raised guidance across CASA, deposits, advances, NIM, ROA and ROE compared to the April guidance.
Answered by Salee S. Nair
Asked by Digant Haria: What is the updated guidance for loan growth, margins, ROA and ROE for the year?
p. 8
“The guidance, if you recall, we had said that CASA growth will be 17% to 18%. Certainly, we will stand by that in the, say, the next quarter, the quarter 2 and the rest of the year”
Salee S. Nair, page 8 of the filed PDF · View the filing
Management expects MSME growth to accelerate and fill the gap as gold loan growth moderates with stabilizing gold prices.
Answered by Salee S. Nair
Asked by Digant Haria: When will retail and MSME growth pick up relative to gold loans?
p. 9
“The 14.89% quarter, the year-on-year MSME growth has now moved up beyond 20%.”
Salee S. Nair, page 9 of the filed PDF · View the filing
Management attributed the uptick to the gold loan portfolio and said corrective measures were already reducing the numbers.
Answered by Salee S. Nair
Asked by Parth: Why did SMA 0, 1 and 2 rise quarter-on-quarter?
p. 10
“There has been a bit of an uptick in the gold loan portfolio that has contributed almost INR100 crores, INR150 crores there.”
Salee S. Nair, page 10 of the filed PDF · View the filing
Management said MSME pricing was adjusted to widen the customer base while gold-linked agri pricing was raised in anticipation of term deposit rate hardening.
Answered by Salee S. Nair
Asked by Parth: Why did agri yields rise while MSME yields fell?
p. 11
“Our cautious approach in ramping up the gold loan yield a little tweaking it upwards in anticipation of a hardening of term deposit rates has worked in favor of us.”
Salee S. Nair, page 11 of the filed PDF · View the filing
Management said it was too early to comment and that the bank was studying the order with legal counsel.
Answered by Salee S. Nair
Asked by Parth: Does the ED order dismissal free up the confiscated shares?
p. 11
“It is a little too early for me to react to that. I think we are studying the order as such.”
Salee S. Nair, page 11 of the filed PDF · View the filing
Management said the slippage was limited to two accounts expected to be resolved in the next quarter.
Answered by Salee S. Nair
Asked by Arvind: Is there an issue behind higher MSME slippages this quarter?
p. 12
“Let me tell you that this is actually only 2 accounts. And from a resolution perspective, you will see that getting resolved in quarter 2, right?”
Salee S. Nair, page 12 of the filed PDF · View the filing
Management named home loan, vehicle loan and loan against property as the three focus products.
Answered by Vincent M D
Asked by Arvind: Which non-gold retail products will drive growth going forward?
p. 13
“There are 3 products which we will be focusing upon home loan in a big way, vehicle loan also again in a big way, LAP loan, loan against property.”
Vincent M D, page 13 of the filed PDF · View the filing
Management gave a breakdown of the Rs 280 crore IT budget across infrastructure, software, cybersecurity and other spend.
Answered by Vincent M D
Asked by Vinith Jain: How much is being spent on IT this year and on cybersecurity specifically?
p. 14
“Overall budget for IT spend for the current year is INR280 crores.”
Vincent M D, page 14 of the filed PDF · View the filing
Management said 40% was not the sustained target but that the 46-47% guided range is being revised downward due to structural initiatives.
Answered by Salee S. Nair
Asked by Nishit Shah: Is the sub-40% cost-to-income ratio sustainable given branch and headcount additions?
p. 17
“We never expected to break the 40% mark, but we did. There has been some one-offs that aided us.”
Salee S. Nair, page 17 of the filed PDF · View the filing
Risks flagged
West Asian crisis and export/GECL exposure being monitored though no stress seen yet
p. 5
“There has been some uptick in the GECL portfolio, GECL 5.0 portfolio. But like I said, we are not foreseeing any as of now, we have not seen any kind of stress in this portfolio.”
Salee S. Nair, page 5 of the filed PDF · View the filing
Commodity risk in gold loan portfolio from fluctuating gold prices
p. 5
“Our portfolio still has the ability to handle almost 20% reduction in the gold price.”
Salee S. Nair, page 5 of the filed PDF · View the filing
Uptick in SMA/portfolio-at-risk in the gold loan book
p. 5
“there has been a bit of a spike in the portfolio at-risk one day, which is now getting contained”
Salee S. Nair, page 5 of the filed PDF · View the filing
Regulatory show cause notices and penalty from the Enforcement Directorate
p. 7
“there has been a show cause notice issued against the bank by the Enforcement Directorate for certain shares being part of the NRI community”
Salee S. Nair, page 7 of the filed PDF · View the filing
Additional provisioning burden ahead of ECL regime implementation
p. 6
“That is additional provision requirement as we move from the IRAC regime to the ECL regime, that is the additional provision that will be required.”
Salee S. Nair, page 6 of the filed PDF · View the filing
CASA degrowth due to focus on term deposits cannibalizing current account balances
p. 4
“We have been focusing on the term deposit in the quarter, and that has, to some extent, cannibalized current account the CASA, which has, sort of, not really up to what we would have anticipated 2.95%.”
Salee S. Nair, page 4 of the filed PDF · View the filing
Slowing gold loan growth as gold prices stabilize
p. 9
“the prices are getting stabilized around $4,000 an ounce. So the kind of Dhurandhar growth you mentioned in gold loan may not be there in the second half of this year”
Salee S. Nair, page 9 of the filed PDF · View the filing
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