Anand Rathi 's research report on Karnataka Bank
Higher Treasury income and lower opex cost led to a sharp, ~93% y/y, PPOP growth for Karnataka Bank. Asset quality and PCR improved. With half the bank’s portfolio under moratorium, asset quality may come under stress once the moratorium is lifted keeping FY21 earnings muted.
Outlook
With the expected pick-up in earnings in FY22 and limited downside from current levels, we maintain a Buy, at a TP of `60 valuing it at 0.3x P/ABV on its FY22e book.
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