Madrasi, also spelled asMadrassi, is a term used as a demonym in the past and a regional slur for people fromsouthern India, usually used by those fromnorthern India.[1] In earlier usage it was ademonym to refer to the people ofMadras Presidency, including the people of present-day Andhra Pradesh, Tamil Nadu, and parts of Karnataka and Kerala, however this use of the term is now outdated.[2][3][4][5][self-published source][6] In present-day, the exonymMadrasi specifically refers to the people in living inMadras (officially called as Chennai), and the termChennaite (orChennaivasi) is the endonym for the people living in the city.
Madrasi is a reference; it could be also a 'regional' slur
Although "Madras" is the name of a place, in this context it is used as an adjective and not as a proper noun.