Buy Karur Vysya Bank; target of Rs290: Anand Rathi

Anand Rathi's research report on Karur Vysya Bank

Stable NIM and strong traction in non-interest income led to KVB’s sturdy Q2 operating performance, which, combined with moderate provisions kept profitability strong, with 1.72% RoA (up 2bps q/q). Overall asset quality improved. Key positives were: 1) strong credit growth in core retail and SME segments, 2) moderate slippages, 3) NIM persisting above 4.1% and 4) a strong balance sheet. With credit growth likely in high-teens and modest credit costs, earnings are expected to be strong.

Outlook

We retain our Buy rating, with a higher 12-mth TP of Rs.290, 1.5x P/ABV on the FY27e book.