Tamilnad Mercantile Bank shares surge 5% after strong Q1FY27 business update

Tamilnad Mercantile Bank witnessed a sharp uptick in its share price on Thursday, rising 4.52% to Rs 763.30, following the release of its provisional business update for the June 2026 quarter (Q1FY27). The stock’s momentum was supported by robust year-on-year growth across key banking metrics, reinforcing investor confidence in the lender’s steady expansion trajectory.

The bank reported total business of Rs 1,21,715 crore as of June 30, 2026, marking a strong 23.04% increase from Rs 98,923 crore in the same period last year. On a sequential basis, total business also advanced 5.76% from Rs 1,15,091 crore in the March 2026 quarter, indicating sustained operational momentum.

Growth was particularly strong in the advances segment, which stood out as a key driver. Gross advances surged to Rs 57,306 crore, up 27.01% year-on-year from Rs 45,120 crore. Sequentially, advances rose 7.36% from Rs 53,379 crore, reflecting healthy credit demand and continued expansion in lending activity.

On the liability side, deposits climbed to Rs 64,409 crore, compared to Rs 53,803 crore a year earlier, registering a 19.71% YoY growth. Deposits also rose 4.37% quarter-on-quarter from Rs 61,712 crore, indicating stable inflows and consistent customer confidence.

The bank’s CASA (Current Account and Savings Account) deposits showed a divergent short-term trend. CASA balances increased 16.94% year-on-year to Rs 16,852 crore, but declined 2.95% sequentially from Rs 17,365 crore in the previous quarter. This suggests a mild shift in deposit mix in the near term, despite strong annual growth in low-cost funds.

Over the past year, the stock has delivered a remarkable rally of around 65%, with the current market capitalisation standing at approximately Rs 11,582 crore. Its 52-week high stands at Rs 763.

From a technical standpoint, the 14-day RSI stands at 46.9, indicating neutral momentum, while the stock trades above 6 out of 8 key simple moving averages (SMAs), suggesting an overall bullish undertone in trend structure.In the March 2026 quarter, institutional interest in the stock improved, with Foreign Portfolio Investors (FPIs) increasing their holding from 4.95% to 6.19%. Mutual funds also began building or expanding positions, raising their stake from nil to 0.35%, indicating a gradual rise in institutional participation and confidence in the stock.

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