Anand Rathi's research report on Karnataka Bank
De-growth in NII (lower margins) and less non-interest income (lower fees) led to 19% q/q decline in core operating profits for Karnataka Bank. Modest provisions supported profitability. Asset quality improved sharply. Ahead, with credit growth in mid-teens and modest credit costs, earnings are expected to be good, with the RoA likely holding near 1%.
Outlook
We maintain our Buy recommendation, with a 12-mth TP of Rs298, 0.8x P/ABV on its FY27e book.
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