Karur Vysya Bank Ltd. share price target

We recently met Karur Vysya Bank (KVB)’s top brass, including business heads, at Karur. Our confidence in the quality/longevity of growth and earnings is emboldened. KVB has been furnishing steady loan growth and will likely have at its disposal healthy optionality, as and when liquidity eases/lending to unsecured turns conducive.

Karur Vysya Bank (KVB) continues to report a robust performance, with PAT at Rs4.9bn and peer-best RoA at ~1.7%, which the bank guides to uphold, aided by healthy operating profitability and contained credit cost.

Karur Vysya Bank (KVB) reported its Q3FY25 results, broadly in line with our estimated pre-quarter numbers and beat on PPOP/PAT. The bank's core portfolio, RAM, continues to grow at a healthy pace (4.2% QoQ/20% YoY) while the corporate segment remains a laggard.

Decent operating performance combined with moderate provisions kept Karur Vysya Bank’s profitability strong, with 1.74% RoA (up 2bps q/q). Overall asset quality and PCR improved, with GNPA at 0.8% (down 27bps q/q) and NNPA at 0.2% (down 8bps q/q).

Stable NIM and strong traction in non-interest income led to KVB’s sturdy Q2 operating performance, which, combined with moderate provisions kept profitability strong.

Karur Vysya Bank (KVB) continues to deliver strong earnings growth with PAT at Rs4.7bn and peer-best RoA at ~1.7%, driven by strong and stable margins @4.1%.

We hosted Karur Vysya Bank (KVB) for overseas NDR. The investors seem to have acknowledged the remarkable transformational journey of KVB under the current management with steady growth and superior RoA.

Karur Vysya Bank (KVB) has seen remarkable transformation under the current management with steady growth and superior RoA. KVB sports one of the lowest cost of deposits alongside superior NIMs among peers.

We initiate coverage of Karur Vysya Bank (KVB) with a “BUY” recommendation and a target price of Rs 265, valuing the bank at 1.7x of its 1 year forward P/Adj. BV.

A strong operating performance along with modest credit costs kept Karur Vysya Bank’s profitability strong, with 1.7% RoA (down 6bps q/q).

KVB continued with its superlative performance in 4Q, led by healthy credit
growth (17% YoY), better core margins @4.2% (+6bps QoQ adjusted for oneoff recovery in 3Q), and NNPA ratio being one of the lowest among peers at
0.4%

Karur Vysya Bank (KVB) has reported yet another strong quarter with higher-than-expected Q4FY24 PAT of INR 4.56bn, driven by better-than-expected core NIM and strong other income, while asset quality remained comfortable.

Despite 18bps QoQ NIM decline (though in-line) and Rs250mn of floating provisions, Karur Vysya Bank (KVB) reported strong Q1FY24 PAT at Rs3.5bn (8% beat) driven by healthy ‘other income’ and ~45% QoQ drop in provisions led by continued strong asset quality.

KVB reported a strong earnings performance in Q1FY24 despite NIM compression. KVB’s 57% YoY PAT growth was led by a strong PPOP growth driven by strong business growth and traction in treasury income.

KVB reported a stellar earnings performance in Q4FY23 aided by NIM expansion, a strong non-interest income, and a sequential softness in non-tax provisions despite taking in some higher specific provisions. The management commentary on business growth ahead was convincing with a modest 14% YoY growth target while the earnings trajectory based on the NIM guidance, non-interest income, expansion plan and opex range, and asset quality performance appeared realistic.

Driven by healthy ‘other income’, Karur Vysya Bank (KVB) reported strong Q4FY23 PAT at Rs3.38bn with 1.5% annualised RoA. NIMs were stable QoQ at 4.37% and asset quality remained strong with miniscule net slippages and further reduction in net NPAs.

Karur Vysya Bank’s (KVB) Q3FY23 financial performance was characterised by its aggressive approach in cleaning up the balance sheet (written-off loans amounting to Rs7.5bn) and sustained improvement in core operating performance.

Karur Vysya Bank (KVB) continues to deliver as per stated strategy as reflected in RoA sustaining above 1% for the 3rd consecutive quarter and net NPL ratio settling at multi-quarter low of 1.4% during Q2FY23.