Metrics raised 6
- FY27 deposit growth guidance raised to 18% (from 16%)
- FY27 advances growth guidance raised to 21-22% (from 20%)
- FY27 total business growth guidance raised to 20% (from 18%)
- FY27 NIM guidance raised to well past 4% (from 3.90%)
- FY27 ROA guidance raised to over 2% (from 1.90%)
- FY27 MSME growth outlook raised to 20%+ (from sub-15% historically)
Metrics cut 1
- FY27 cost-to-income ratio target lowered to below 46-47% (from 46-47%)
Event Participants
Executives
3
- Salee S. Nair (Managing Director & CEO)
- Vincent M D (Executive Director)
- Sanjoy Kumar Goel (Chief Financial Officer)
Analysts
6
- Arvind (Sundaram Alternates)
- Darshan Deora (Indvest Group)
- Digant Haria (GreenEdge Wealth)
- Laksh (Share India Securities)
- Nishit Shah (ViSolitech Investment Advisor)
- Parth (360 ONE Capital)
- Saket Kapoor (Kapoor & Co.)
- Vinith Jain (Siddhi Capital)
Financials & KPIs
| Metric | Reported | Commentary |
|---|---|---|
| Total Business | ₹1,21,715 crores | +23% YoY; highest growth in 14 years, ~7% above industry growth |
| Total Deposits | ₹64,409 crores | +19.71% YoY; record mobilization of ₹2,697 crores in Q1 vs. ₹114 crores in Q1 FY26 |
| CASA | 26.16% of deposits | +16.94% YoY; -2.95% QoQ due to term deposit focus; current accounts -8.75% QoQ |
| Term Deposits | NA | +20.73% YoY; strategic shift to secure resource base |
| Non-callable Deposits | NA | +18.44% QoQ; 80.39% over 1-year tenure |
| Gross Advances | NA | +27.01% YoY; CD ratio at 88.97% (+511 bps YoY) |
| RAM Advances (Retail, Agri, MSME) | NA | +28.47% YoY |
| MSME Advances | NA | +20.09% YoY (up from 14.89% last year) |
| Net Interest Income (NII) | NA | +32.01% YoY |
| Operating Profit | ₹611 crores | +48.22% YoY; QoQ rise from ₹522 crores to ₹611 crores |
| Net Profit | ₹411.51 crores | +34.97% YoY; all-time high in bank's 105-year history |
| Net Interest Margin (NIM) | 4.29% | +45 bps YoY (up from 3.84%) |
| Cost of Deposits | 5.68% | -3 bps QoQ (from 5.71%) |
| Yield on Advances | 10.10% | +17 bps QoQ (from 9.93%) |
| Cost-to-Income Ratio | 39.10% | Broke below 40% mark (guided 46-47%); aided by some one-offs |
| ROA | 2.14% | +32 bps YoY (from 1.82%) |
| ROE | 15.93% | +263 bps YoY |
| EPS | ₹25.99 | NA |
| Book Value per Share | ₹667 | NA |
| GNPA | 0.69% | -53 bps YoY |
| NNPA | 0.17% | -16 bps YoY |
| Provision Coverage Ratio (PCR) | 75.36% (on-book) / 96.04% (total) | NA |
| Slippage | 0.08% (8 bps) | Under control |
| Credit Cost | 0.09% (9 bps) | NA |
| SMA (Portfolio at Risk) | 2.21% | -84 bps YoY; temporary uptick from ₹100-150 crores in gold loans, now contained |
| Capital Adequacy (CRAR) | 32.33% | One of the highest in the industry |
| Tier 1 Capital | 31.30% | NA |
| Liquidity Coverage Ratio (LCR) | 140.74% | NA |
| Net Stable Funding Ratio (NSFR) | 150.74% | NA |
| Leverage Ratio | 12.5% | Vs. 3.5% regulatory minimum |
| Maximum Permissible CD Ratio | 99% | Current 88.97%; room to grow |
| Branches | 628 | Added 6 in Q1 (3 in TN, 3 outside); targeting 60 additions in FY27 |
| Employees Added (Q1) | 325 | NA |
| Average Business per Branch | ₹193.81 crores | NA |
| Business per Employee | ₹23.75 crores | NA |
| Profit per Employee | ₹32.12 lakh | NA |
| Balance Sheet Size | ~₹80,000 crores | As of June 30, 2026 |
| Total Shareholders' Fund | ₹10,562 crores | NA |
| ECL Provision Set Aside | ₹276 crores | Includes ₹250 crores COVID provision + ₹26 crores Q1 stress NFB provision |
| Total ECL Requirement (estimated) | ₹324 crores | RBI allows 5-year spread; bank aims to fully provide in FY28 |
| Mutual Fund Holding | 0.577% | Up from nil on June 30, 2025 |
| FPI Holding | 6.73% | Up from 4.576% YoY |
| IT Spend (FY27 budget) | ₹280 crores | Infra 21%, software 35%, cybersecurity 10%, others 35% |
Geographic & Segment Commentary
Retail Segment: Retail loans were flat QoQ due to migration of ₹100-150 crores from retail gold loans to agri gold loans; vehicle loans grew 25.7%, home loan downtrend arrested with sanctions picking up, and management guides for 8-10% growth in home loans in FY27.
Agri Segment: Agri gold loan migration and conscious yield uplift drove segment yield from 9.75% to 10.54%; agri remains ~40% of advances portfolio with negligible unsecured exposure.
MSME Segment: MSME grew 20.09% YoY (up from 14.89% previously) and is the key growth lever going forward; portfolio yield moderated from 10.5% to 10% due to customer diversification; one-off slippage of ₹37 crores (2 accounts) expected to resolve in Q2; gross NPA improved from ₹202.34 crores (June '25) to ₹160.35 crores (June '26).
Gold Loans: Portfolio yields 10.58%; average LTV 56.98%; cap at 75% (consumption) and 85% inclusive of interest; portfolio can absorb 20% gold price fall; growth transitioning from price-driven to tonnage-driven (customer acquisition, 10-minute disbursement).
Other Corporate Advances: 5.62% of portfolio with 6.69% YoY growth; export credit at 3.53% (₹685 crores) with 32.14% West Asia exposure shows no stress signals from geopolitical events.
Unsecured Portfolio: Just 10 bps of overall advances with negligible NPAs (₹56 lakhs); bank maintains conservative secured-lending stance.
Company-Specific & Strategic Commentary
ECL Preparedness: Bank has set aside ₹276 crores toward Expected Credit Loss transition (effective April 1, 2027), including ₹250 crores of unutilized COVID contingency buffer and a unique ₹26 crores 100% provision against stressed non-fund based facilities, making TMB largely insulated from industry-wide ECL impact.
IT & Digital Modernization: FY27 IT budget of ₹280 crores with 35% allocated to new software, 21% to infrastructure, and 10% to cybersecurity (management noted this is not a hard cap); mobile banking and digital transactions continue to grow while branch counter transactions moderated from 59 lakh to 55 lakh.
Branch Expansion: Targeting 60 new branches in FY27 (vs. 44 added in FY26); 6 already opened in Q1 with 50% outside Tamil Nadu (now 171 of 628 branches are outside TN), supporting geographic diversification.
Gold Loan Tonnage Strategy: As gold prices stabilize around $4,000/oz, focus shifting from price-driven to tonnage-driven growth via new customer acquisition, local advertising, and sub-10-minute disbursement; informal internal cap maintained at ~50% of advances (currently 46.97%).
MSME Hybrid Growth: Bank expanding MSME via hybrid CGTMSE + collateral model to ensure promoter skin-in-the-game; LOS, structural HR, and CMC investments yielding results with growth upgraded to 20%+ from sub-15% historically.
ED Show Cause Notice Update: Appellate Tribunal partly allowed bank's appeal on July 9, 2026; penalty reduced from ₹17 crores to ₹3.4 crores (refund of ₹13.60 crores expected in Q2); ED's confiscation claim against foreign investor-held shares dismissed; SCN 2 adjudication pending; bank engaged top legal firm to study implications.
Guidance & Outlook
| Metric | Guidance / Outlook | Commentary |
|---|---|---|
| Deposit Growth (FY27) | +18% (upgraded from +16%) | Driven by system response to bank's deposit overflows; will review in Q2 |
| CASA Growth (FY27) | 17-18% | Reaffirmed; Q2 expected to more than make up for Q1 dip |
| Advances Growth (FY27) | 21-22% (upgraded from 20%) | MSME ramp-up compensating for any moderation in gold loan per-gram growth |
| Total Business Growth (FY27) | 20% (upgraded from 18%) | +2% upgrade on confidence |
| NIM (FY27) | Well past 4% (upgraded from 3.90%) | Yield-mix and term deposit repricing supportive |
| ROA (FY27) | Over 2% (upgraded from 1.90%) | NA |
| ROE (FY27) | 15% (revised) | Already at 15.93% in Q1 |
| GNPA (FY27) | Below 1% | NA |
| Cost-to-Income Ratio (FY27) | Below 46-47% (prior guidance) | Q1 broke 40% on one-offs; structural gains lowering the bar |
| Vehicle Loan Growth (FY27) | ~25% | Momentum sustains |
| Home Loan Growth (FY27) | 8-10% | Downtrend arrested; sanctions picking up |
| Branch Additions (FY27) | 60 branches | 6 added in Q1 |
| Full ECL Provisioning | In FY28 (April 1, 2027 start) | May front-load to Q1 FY28 itself; ₹48 crores residual cushion available |
| MSME Sector Growth | Well beyond 20% | Post-investment response under evaluation; will confirm at Q2 close |
Risks & Constraints
| Risk | Context |
|---|---|
| Gold Loan Concentration | At ~47-48% of advances (informal cap 50%), concentration creates commodity risk exposure; portfolio can absorb only 20% gold price fall; cushion sufficient per management |
| Gold Price Plateau Impact | Gold stabilizing around $4,000/oz removes the price-driven tailwind; future growth depends on tonnage (customer acquisition) execution |
| CASA Cannibalization | Term deposit focus led to -2.95% QoQ CASA dip; recovery dependent on TBG strengthening and branch expansion |
| SMA Uptick | SMA rose QoQ due to ₹100-150 crores in gold loans (PAR-1); corrective mechanisms active, but continued migration could pressure asset quality |
| ED Regulatory Matters | SCN 2 adjudication pending; bank studying SCN 1 order implications; further ED appeal could reintroduce uncertainty; refund of ₹13.60 crores expected in Q2 |
| ECL Transition | ₹324 crores estimated ECL requirement, ₹276 crores set aside; RBI allows 5-year spread, bank aims to absorb in FY28 |
| West Asia / Geopolitical Risk | 32.14% of export credit (₹685 crores) exposed to West Asia; minor uptick in GECL 5.0 portfolio, but no stress observed as of Q1 |
| Cost-to-Income Sustainability | Q1's sub-40% level aided by one-offs; sustainable run-rate remains 46-47% per management |
| MSME Slippage Volatility | ₹37 crores MSME slippage (2 accounts) in Q1—though one-off and expected to resolve in Q2—signals occasional chunky slippages possible |
Q&A Highlights
Q1 FY27 Guidance and Growth Trajectory
- Question: On the back of strong Q1 performance, what is the full-year guidance for loan growth, margins, ROA, and ROE? (Digant Haria, GreenEdge Wealth)
- Answer: Total business growth guided up to 20% (from 18%), deposit growth to 18% (from 16%), advances to 21-22% (from 20%), NIM well past 4%, ROA over 2%, ROE at 15% (revised), and GNPA below 1%. Management noted 7th consecutive quarter of under-guidance and over-delivery, driven by structural tech, HR, and operational investments. (Salee S. Nair)
Gold Loan Strategy and Retail/MSME Shift
- Question: When will non-gold retail and MSME businesses meaningfully pick up to reduce gold loan concentration? (Digant Haria, GreenEdge Wealth)
- Answer: MSME growth has moved from 14.89% YoY to over 20% YoY and will compensate for any moderation in gold loan per-gram growth; vehicle loan up 25.7%, home loan downtrend arrested; gold loan strategy shifting to tonnage (new customer acquisition, sub-10-minute disbursement). (Salee S. Nair)
CASA Recovery Strategy
- Question: With CASA down QoQ, what is the strategy to improve CASA going forward? (Digant Haria, GreenEdge Wealth)
- Answer: Term deposit focus cannibalized CASA in Q1; now strengthening TBG (Transaction Business Group) and targeting 60 new branches in FY27 to drive CASA recovery, expected to be more than recovered in Q2. (Salee S. Nair)
MSME Growth Guidance and El Niño/Geopolitical Impact
- Question: Specific guidance for MSME growth and any stress from El Niño / West Asia? (Laksh, Share India Securities)
- Answer: Specific MSME guidance deferred to Q2 close; structural LOS/HR/IT/CMC investments bearing fruit; bank confident MSME growth will exceed 20% for FY27. No stress observed on cash flows or customer-level review from El Niño or geopolitical events. (Salee S. Nair)
SMA Uptick and Yield Movements
- Question: SMA 0/1/2 increased QoQ—is any specific portfolio responsible? Why has agri yield risen while MSME yield fallen? (Parth, 360 ONE Capital)
- Answer: ~₹100-150 crores uptick in gold loan SMA has begun to reverse via corrective mechanisms. Agri yield rose to 10.54% on conscious pricing to prep for term deposit rate hardening; MSME yield moderated as bank diversified customer base. (Salee S. Nair)
ED Show Cause Notice Update
- Question: Following the tribunal order dismissing ED's claim for confiscation, are the foreign investor shares now free from encumbrance? (Parth, 360 ONE Capital)
- Answer: Bank is studying the order with a top legal firm; bank itself is not directly involved (it is ED vs. certain investors); ED may file further appeal; clarity expected during the quarter. ₹17 crore penalty reduced to ₹3.4 crores, ₹13.60 crores refund expected in Q2. (Salee S. Nair)
Retail Portfolio and MSME Strategy
- Question: What's the strategy for non-gold retail products to scale meaningfully? (Arvind, Sundaram Alternates)
- Answer: Three focus areas: home loans (targeting 8-10% growth), vehicle loans (already 25.7%), and loan against property. Bank expects non-jewel retail to grow alongside MSME. (Vincent M D)
Gold Loan Growth with Flat Prices
- Question: If gold prices remain flat, what's the outlook for gold loan growth? (Arvind, Sundaram Alternates)
- Answer: Growth will be tonnage-driven (customer acquisition) rather than per-gram; bank to deploy dedicated cadre for gold loans; internal informal cap at 50% of advances (currently ~47%); full-year advances growth guidance 21-22%. (Salee S. Nair)
IT Spending and Cybersecurity
- Question: IT spending plans for the year? (Vinith Jain, Siddhi Capital)
- Answer: ₹280 crores budget—21% infrastructure, 35% new software/enhancement, 10% cybersecurity (not a hard cap, will scale as needed), 35% others. (Vincent M D)
ECL Provisioning Plan
- Question: Will there be further ECL provisions in FY27, or will the residual be spread over later years? (Vinith Jain, Siddhi Capital)
- Answer: ₹276 crores already set aside (₹250 crores COVID buffer + ₹26 crores Q1 stress NFB) against ₹324 crores estimated requirement; no further provision in current year unless triggered; RBI allows 5-year spread but bank targets full provisioning in FY28, possibly front-loaded to Q1. (Salee S. Nair)
Gold Loan Internal Ceiling
- Question: What is the internal cap on gold loan share of portfolio? (Vinith Jain, Siddhi Capital)
- Answer: Informal internal cap at 50% (currently 46.97%); expects non-gold advances to grow in tandem via structural, HR, and tech investments; portfolios to grow in different directions going forward. (Salee S. Nair)
Gold Loan Structure and LTV
- Question: What's the structure of gold loans and LTV caps? (Darshan Deora, Indvest Group)
- Answer: Bullet payment loans (6 months or 1 year); principal plus interest on due date not to exceed 85% for consumption loans; 75% standard cap on principal; agri gold uses same criteria but no separate LTV cap; automated daily loan-level tracking. (Salee S. Nair, Vincent M D)
CGTMSE and MSME Approach
- Question: Will bank use CGTMSE to ramp up MSME book? (Nishit Shah, ViSolitech Investment Advisor)
- Answer: Will use a hybrid model (CGTMSE + collateral) to ensure promoter skin-in-the-game; bank remains conservative with secured-lending focus; unsecured book at just 10 bps. (Salee S. Nair)
Cost-to-Income Sustainability
- Question: Is sub-40% cost-to-income sustainable given the branch and hiring push? (Nishit Shah, ViSolitech Investment Advisor)
- Answer: Original guidance was 46-47%; Q1 broke 40% on one-offs plus structural benefits from HR/IT investments raising NII; revising guidance to be below 46-47%. (Salee S. Nair)
Key Takeaway
TMB delivered its strongest Q1 ever in its 105-year history, with total business growing 23% YoY (highest in 14 years), net profit up 34.97% YoY at ₹411.51 crores (an all-time high), NIM expanding 45 bps to 4.29%, ROA at 2.14%, and ROE at 15.93%, while GNPA declined 53 bps YoY to 0.69% and NNPA to 0.17%—this marks the seventh consecutive quarter of over-delivery relative to guidance. Strategic focus areas include (a) MSME ramp-up (now growing 20%+ YoY with hybrid CGTMSE-collateral model and structural investments in LOS/HR/CMC), (b) gold loan tonnage strategy transitioning from per-gram to customer-acquisition driven growth (sub-10-minute disbursement, internal cap at 50% of advances), and (c) retail revival via vehicle loans (+25.7%) and home loans (downtrend arrested). Management upgraded FY27 guidance across all major metrics—deposit growth to 18%, advances to 21-22%, total business to 20%, NIM past 4%, ROA over 2%—and pre-positioned ₹276 crores toward the April 2027 ECL regime to insulate the bank from industry-wide provision impact. Key risks to watch include gold loan concentration (~47% of book, vulnerable to commodity shocks though 20% price-fall cushion exists), CASA cannibalization from term-deposit focus (Q1 CASA -2.95% QoQ), ongoing ED adjudication (SCN 2 pending), SMA uptick in gold loans (now under corrective action), and sustainability of sub-40% cost-to-income ratio (aided by one-offs in Q1; long-term guidance at 46-47%); overall, the bank remains well-capitalized (CRAR 32.33%, LCR 140.74%) with strong structural tailwinds for sustained growth in FY27.