Arihant Capital has recommended accumulate rating on Karnataka Bank with a target price of Rs 190 in its research report dated May 16, 2017.
Arihant Capital's research report on Karnataka Bank
The Karnataka Bank Ltd for the quarter ended Q4 FY 17 reported rise in its net profit by 30% YoY to Rs 138 crs. Sequentially the profit rose by 102%. This was majorly due to higher other income which amplified by 83.3% YoY and lower employee cost which fell by 30.6% QoQ and also higher operating income which grew 29.4% YoY and 91.6% QoQ.
At CMP of Rs 164 the stock trades at 8.3 P/E(x) and 1.2 P/ABV(x) to its FY 19E. We have valued the stock at 1.35(x) to its FY 19E ABV and arrived at a fair value of Rs 190 for the stock. We have ‘ACCUMULATE’ rating for the stock.
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