Buy Karur Vysya Bank; target of Rs 267 : ICICI Securities

ICICI Securities is bullish on Karur Vysya Bank recommended buy rating on the stock with a target price of Rs 267 in its research report dated September 12, 2025.

Broker Research

September 12, 2025 / 11:55 IST

Buy

26 Aug, 2025 12:21

Volume

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ICICI Securities research report on Karur Vysya Bank

For Karur Vysya Bank (KVB), recovery from technical written-off (RTWO) contributed ~57bps to RoA (pre-tax) of ~2.3% for FY25. We note that disclosures and accounting for RTWO vary across banks; yet, KVB appears to exhibit the highest contribution from RTWO. While investors are justified in considering RTWO as non-core, we argue that for KVB it can be recurring (though moderating) in the near term. KVB’s RTWO rate (~14% of O/s pool) is comparable vs. peers. Importantly, there is a massive difference in the quantum (~2–10x of the peers as proportion of loans / GNPA) and quality (new vintage, secured and with some recourse) of the pool. We model an unchanged mild moderating RTWO trajectory, but believe that RTWO should sustain healthy contribution at ~0.4%/0.3% for FY26E/FY27E. Maintain BUY with unchanged PAT/target multiple. Target price is revised to reflect the bonus share adjustment.

Outlook

There is no change in our estimates. We maintain BUY on KVB with an unchanged target multiple of ~1.65x on FY27E ABV. Our target price, is, however, adjusted to INR 267 (vs. INR 320 earlier), due to the 1:5 bonus share adjustment.

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