Karur Vysya Bank Q1 Results Review - Yet Another Strong, Steady Quarter: ICICI Securities

ICICI Securities Report

Karur Vysya Bank Ltd. reported yet another strong quarter with Q1 FY25 profit after tax of Rs 4.6 billion, up 28% YoY, driven by ~15% YoY growth in operating earnings and a decline in provisioning. Return on asset remained strong at ~1.7%. Asset quality remained comfortable with net non-performing asset at 38 basis points (down 2 bps QoQ) and net slippages (net of TWO recoveries) being negative.

The bank has one of the lowest cost of deposits and net NPAs across peers. In an environment marked with slower deposits growth, Karur Vysya seems well positioned with lowest cost of deposits (within peers) and recent (and rising) investment in resources/distribution.

We keep our loan CAGR estimates unchanged at ~15% for FY24–26, driven by focus on granularity. Despite likely net interest margin compression, we see the bank delivering ~1.6/1.5% RoA for FY25E/26E (amongst highest across peers), driven by easing opex and improving credit costs.

Maintain Buy with an unchanged target price of Rs 250, valuing the stock at ~1.5 times FY26E adjusted book value.

Click on the attachment to read the full report:

DISCLAIMER

This report is authored by an external party. NDTV Profit does not vouch for the accuracy of its contents nor is responsible for them in any way. The contents of this section do not constitute investment advice. For that you must always consult an expert based on your individual needs. The views expressed in the report are that of the author entity and do not represent the views of NDTV Profit.

Users have no license to copy, modify, or distribute the content without permission of the Original Owner.