Buy Karur Vysya Bank; target of Rs 135: Anand Rathi

Anand Rathi's research report on Karur Vysya Bank

KVB’s Q3 FY23 profitability improved, its RoA coming at 1.32% (up 40bps q/q) on account of a strong operating performance. Key positives were 1) improving asset quality, 2) credit growth in mid-teens, 3) expanded margins and 4) strong liquidity and capitalisation. With credit growth expected to be in the mid-teens and moderating credit costs, earnings are expected to be strong.

Outlook

We retain our Buy rating, with a TP of Rs135, valuing the stock at 1.1x P/ABV on the FY25e book.