Buy Karur Vysya Bank; target of Rs 338: Anand Rathi

buy

Anand Rathi's research report on Karur Vysya Bank

Lower margins were counterbalanced by lower opex and provisions, which kept Karur Vysya Bank’s profitability robust, with 1.73% RoA (stable q/q). Headline asset quality improved, with GNPA at 0.66% (down 10bps q/q) and NNPA at 0.19% (down 1bps q/q). Key positives were 1) slippages <1% (0.9% of loans), 2) the lowest stress pipeline of peers (SMA 30+ pool at 60bps), 3) strong credit growth in core retail (20% y/y) and SME (19% y/y) segments and 4) a strong balance sheet. With credit growth likely higher than the system and modest credit costs, earnings are expected to be good.

Outlook

We retain our Buy, with a 12-mth TP of Rs338, 1.5x P/ABV on the FY28e book.

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Karur Vysya Bank - 25072025 - anand