7 KTKBANK share price target reports by brokerages below. See what is analyst's view on KTKBANK share price forecast, rating, estimates, valuation and prediction behind the target. You may use these research report forecasts for long-term to medium term for your investment or trades in 2020.
We have revised our NII estimates by -2.2%/-7.2%/-9.8%, PPOP estimates by 11.9%/-8.7%/-7.7% and PAT estimates by 1.7%/-11.8%/8.3% for FY20/FY21/FY22, respectively. We have retained Buy rating on KBL, retaining our target price of Rs87, valuing the stock at 0.4x H1FY22E P/BV.
Slippages in Q3 FY20 for Karnataka Bank were `6.4bn, of which `2.5bn came from the previously disclosed stressed accounts. Now, with most of the stress from the corporate book recognized, we expect the slippage run rate to be modest ahead. With stable asset quality, we expect credit cost to moderate in coming quarters leading to RoE normalisation. We retain our Buy recommendation, with a higher target of `95 (earlier `90) at 0.4x P/ABV of its FY22e book.
While the bank has maintained its asset quality, improvement in operating performance has to be seen. Operating profit growth is likely to be aided by improved NII with NIM bottoming out and focus on retail segment. However the elevated credit cost with low PCR of ~28% will impact the bottom-line. The stock is quoting at attractive valuations of ~0.4x FY21E ABV and we retain BUY on KBL with TP of Rs 116 (0.6x FY21E ABV).
Karnataka Bank (KBL) reported 4QFY19 results with the key pointers being: (1) Stock of GNPAs was contained; improving NPAs guidance retained with only 2 accounts majorly concerning (2) Multiple levers on the income front – improving yields, traction in TPP tie-ups and liability franchise build-up – could drive growth (3) Cost reduction measures, opening low-cost branches and digitalization are likely to support profitability from a cost perspective. (See comprehensive conference call takeaways on page 2 for significant incremental colour.) Per se, on the key P&L items, KBL posted 5.6% NII growth YoY at Rs4,946mn, PPOP decline of 5.1% YoY at Rs3,500mn and PAT growth of 7.5% YoY at Rs1,754mn. We have revised our estimates for FY20/FY21 and retained Buy rating on KBL, revising our target price on it to Rs118 (from Rs119 earlier) and valuing the stock at 0.5x FY21E P/BV.
Weaker margins and higher opex led to decline in KBL’s operating profit in Q4.With most of the corporate-book stress already recognized, we expect the slippage run rate to ease. However, stress could arise from agriculture portfolio, since most of the concentration is in the home state which will be a key monitrable. Controlled provisioning is a key positive for the bank although higher opex and lower provision coverage remain negatives. However, the stock is quoting at attractive valuations of ~0.5x FY21E ABV and we retain BUY on KBL with TP of Rs 130 (0.6x FY21E ABV).
As per the bank, slow growth of NBFCs is likely to continue and in a way, is proving to be positive for the banking industry. Further, in terms of the credit growth, for the bank as well as the industry, MSME sector is likely to be the growth engine going forward . Loan book is improving both quantitatively and qualitatively as evidenced from improved CD Ra- tio, decreasing slippage ratio, declined GNPA & NNPA ratios, improved operational profit and im- proved NII. With sustained credit growth, improved earnings, declining stress in book and CASA target of 29% are positives , bank should be able to wither provision pressure and fur- ther consolidate its position in the ensuing quarter. Therefore, we recommend to BUY with initial target of Rs 135 giving an upside potential of 15%
SOURCE: Data from D'Market via Quandl. Intraday data delayed 15 minutes.
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