AgenciesICICI Securities has buy call on Karur Vysya Bank with a target price of Rs 80. The current market price of Karur Vysya Bank is Rs 55.9. Time period given by analyst is one year when Karur Vysya Bank Ltd. price can reach defined target.
Karur Vysya Bank Ltd., incorporated in the year 1916, is a banking company (having a market cap of Rs 4428.06 Crore).
Karur Vysya Bank Ltd. key Products/Revenue Segments include Interest & Discount on Advances & Bills, Income From Investment, Interest On Balances with RBI and Other Inter-Bank Funds and Interest for the year ending 31-Mar-2022.
For the quarter ended 30-06-2022, the company reported a Standalone Total Income of Rs 1672.60 Crore, up 3.58 % from last quarter Total Income of Rs 1614.75 Crore and up 4.80 % from last year same quarter Total Income of Rs 1595.93 Crore. The bank reported net profit after tax of Rs 228.75 Crore in latest quarter.
Investment Rationale
Credit cost at sub-1% for four successive quarters reflects superior portfolio quality. Considering SMA30+ / SMA-2 pool at 1% / 0.5% respectively and collections at >98% in Jun’22, credit cost in FY23E is likely to trend downward from FY22 levels. This would ensure that the improving RoA trajectory continues. Taking cognisance of the increased macroeconomic activity and KVB’s encouraging asset quality outlook, management has revised its FY23 credit growth guidance upward to 15% vs 12% earlier. The brokerage believes KVB’s upgraded digital platform, cost optimisation drive and gradual normalisation of credit cost would help sustain the improving RoA trajectory going forward from the current level of 1%. It maintains BUY with a revised target price of Rs80 as it rolls over estimates to Sep’23 BVPS, implying 0.8x P/BV on FY24E BVPS. Key risks: a) stress unfolding higher than anticipated, and b) moderation in credit growth.
Promoter/FII Holdings
Promoters held 2.28 per cent stake in the company as of 31-Mar-2022, while FIIs owned 15.35 per cent, DIIs 21.89 per cent.
Karur Vysya Bank Ltd., incorporated in the year 1916, is a banking company (having a market cap of Rs 4428.06 Crore).
Karur Vysya Bank Ltd. key Products/Revenue Segments include Interest & Discount on Advances & Bills, Income From Investment, Interest On Balances with RBI and Other Inter-Bank Funds and Interest for the year ending 31-Mar-2022.
Financials
For the quarter ended 30-06-2022, the company reported a Standalone Total Income of Rs 1672.60 Crore, up 3.58 % from last quarter Total Income of Rs 1614.75 Crore and up 4.80 % from last year same quarter Total Income of Rs 1595.93 Crore. The bank reported net profit after tax of Rs 228.75 Crore in latest quarter.
Investment Rationale
Credit cost at sub-1% for four successive quarters reflects superior portfolio quality. Considering SMA30+ / SMA-2 pool at 1% / 0.5% respectively and collections at >98% in Jun’22, credit cost in FY23E is likely to trend downward from FY22 levels. This would ensure that the improving RoA trajectory continues. Taking cognisance of the increased macroeconomic activity and KVB’s encouraging asset quality outlook, management has revised its FY23 credit growth guidance upward to 15% vs 12% earlier. The brokerage believes KVB’s upgraded digital platform, cost optimisation drive and gradual normalisation of credit cost would help sustain the improving RoA trajectory going forward from the current level of 1%. It maintains BUY with a revised target price of Rs80 as it rolls over estimates to Sep’23 BVPS, implying 0.8x P/BV on FY24E BVPS. Key risks: a) stress unfolding higher than anticipated, and b) moderation in credit growth.
Promoter/FII Holdings
Promoters held 2.28 per cent stake in the company as of 31-Mar-2022, while FIIs owned 15.35 per cent, DIIs 21.89 per cent.
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