Buy Karur Vysya Bank; target of Rs 270: ICICI Securities

ICICI Securities is bullish on Karur Vysya Banks recommended buy rating on the stock with a target price of Rs 270 in its research report dated September 18, 2024.

Broker Research

September 19, 2024 / 11:49 IST

buy

26 Aug, 2025 12:21

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ICICI Securities research report on Karur Vysya Bank

We hosted Karur Vysya Bank (KVB) for overseas NDR. The investors seem to have acknowledged the remarkable transformational journey of KVB under the current management with steady growth and superior RoA. The management explained the hard work behind the numbers, suggesting that superior performance / delivery on NIM, growth, asset quality and RoA are structural and outcome of the multiple initiatives undertaken. The bank acknowledged headwinds on systemic deposits growth, NIM and credit costs but explained the steps it is taking to mitigate the same. The bank has one of the lowest LDRs (83%) and one of the highest LCRs (185%), and thus, should sustain ~15% CAGR in loan for FY24–26E. KVB’s all-inclusive SMA 1+2 (<0.5%) and NNPA (<0.4%), being amongst the lowest, alongside its limited (<3%) exposure to unsecured retail, nourishes our confidence of benign credit costs.

Outlook

Our estimates are unchanged. Overall, we expect KVB to sustain its leadership on RoA/RoE within mid and small private banks space. Maintain BUY with an unchanged target price of INR 270, valuing the stock at ~1.6x FY26E ABV. Key risk is slower-than-expected deposits growth impacting growth and NIM.

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