Tamilnad Mercantile Bank Shares Jump 5% After Strong Q1FY27 Business Update

Tamilnad Mercantile Bank (TMB) shares surged nearly 5% on 2 July 2026 after the private sector lender reported a robust provisional business update for the first quarter of FY2026-27 (Q1FY27). Strong growth in advances, deposits and overall business boosted investor sentiment, helping the stock touch its 52-week high of ₹763 during Thursday's trading session.

The bank reported healthy double-digit growth across key operating metrics, with total business rising 23.04% year-on-year to ₹1.22 lakh crore, driven by strong loan growth and steady deposit mobilisation. The update also highlighted continued momentum on a sequential basis, reflecting healthy credit demand and stable business expansion.

The positive business performance, coupled with rising institutional ownership and a bullish technical setup, reinforced confidence among investors. Tamilnad Mercantile Bank shares have rallied around 65% over the past one year, making it one of the stronger-performing banking stocks during the period.

Tamilnad Mercantile Bank Q1FY27 Business Highlights

Particulars	Q1FY27	Q1FY26	YoY Growth	QoQ Growth
Total Business	₹1,21,715 Cr	₹98,923 Cr	23.04%	5.76%
Gross Advances	₹57,306 Cr	₹45,120 Cr	27.01%	7.36%
Deposits	₹64,409 Cr	₹53,803 Cr	19.71%	4.37%
CASA Deposits	₹16,852 Cr	₹14,412 Cr*	16.94%	-2.95%

Approximate based on reported growth.

Advances Drive Strong Business Growth

The biggest contributor to the bank's quarterly performance was its loan book. Gross advances increased 27.01% year-on-year to ₹57,306 crore, while also registering a 7.36% sequential increase from the March 2026 quarter.

The strong credit growth indicates continued demand across lending segments and reflects the bank's expanding loan portfolio.

Deposits Continue to Grow

Tamilnad Mercantile Bank also reported healthy growth in deposits.

Total deposits rose 19.71% year-on-year to ₹64,409 crore, while quarter-on-quarter deposits increased 4.37%, demonstrating stable customer inflows and continued confidence in the bank.

Although CASA deposits grew nearly 17% compared to last year, they declined slightly on a sequential basis, indicating a modest shift in the deposit mix during the quarter.

Stock Performance

The strong business update triggered buying interest in the stock.

Metric	Value
Share Price Gain	Nearly 5%
Intraday High	₹763.30
52-Week High	₹763
One-Year Return	Around 65%
Market Capitalisation	Approximately ₹11,582 crore

The rally reflects positive investor sentiment following the bank's consistent operational performance.

Institutional Investors Increase Holdings

Institutional participation in the stock has also improved.

During the March 2026 quarter:

• Foreign Portfolio Investor (FPI) holding increased from 4.95% to 6.19%.
• Mutual Funds initiated and expanded positions, increasing their stake from 0% to 0.35%.

The rise in institutional ownership signals growing confidence in the bank's long-term growth prospects.

Technical View

From a technical perspective, the stock continues to maintain a positive structure.

Technical Indicator	Status
14-Day RSI	46.9 (Neutral)
Moving Averages	Trading above 6 of 8 key SMAs
Trend	Bullish

While momentum indicators remain neutral, the stock continues to trade above most of its important moving averages, indicating a constructive medium-term trend.

What Investors Should Watch

Investors will closely monitor the following factors in the coming quarters:

• Sustained loan growth momentum.
• Deposit mobilisation and CASA ratio.
• Asset quality trends.
• Net interest margin (NIM) performance.
• Q1FY27 financial results and profitability.
• Institutional investment activity.

Continued improvement in these metrics could support the bank's long-term growth trajectory.

Key Takeaways

Highlights	Details
Stock Movement	Up nearly 5%
Total Business Growth	23.04% YoY
Advances Growth	27.01% YoY
Deposit Growth	19.71% YoY
One-Year Return	Around 65%
Institutional Interest	FPI and Mutual Fund holdings increased

Why did Tamilnad Mercantile Bank shares rise today?

The stock gained nearly 5% after the bank reported strong Q1FY27 business growth, led by higher advances and deposits.

How much did total business grow?

Total business increased 23.04% year-on-year to ₹1,21,715 crore.

What was the growth in advances?

Gross advances rose 27.01% YoY to ₹57,306 crore, making it the strongest contributor to overall business growth.

How much did deposits increase?

Deposits climbed 19.71% year-on-year to ₹64,409 crore, while also growing 4.37% sequentially.

Has institutional ownership increased?

Yes. During the March 2026 quarter, FPI holdings increased to 6.19%, while mutual funds raised their stake to 0.35%, indicating growing institutional confidence.