At mid-day on October 17, shares of Karur Vysya Bank were trading more than 7 percent higher on the NSE, at Rs 147.30. The stock opened at Rs 138.55, 0.6 percent higher than yesterday's close. On October 16, the bank announced a 51 percent year-on-year increase in net profit for Q2FY24.
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In a regulatory filing, Karur Vysya Bank reported a net profit of Rs 378 crore for the Quarter ending September 2023, a 51 percent increase from Rs 250 crore during the previous fiscal. Operating profit for the period grew 12 percent year-on-year to Rs 638 crore from Rs 572 crore for the same period.
For Q2FY24, the bank reported a net interest income of Rs 915 crore, an 11.45 percent increase from the previous fiscal. Net interest margin for the same period was 4.07 percent compared to 4.10 percent in the previous fiscal.
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According to analysts at HDFC Securities, Karur Vysya is well-placed to deliver its targeted RoA of nearly 1.5 percent through accelerated efforts on leveraging its product mix, better cross-sell outcomes, and productivity gains. For Q2FY24, the bank reported an improved GNPA (Gross NPA) and NNPA (Net NPA) to 1.7 percent and 0.5 percent, respectively, against 2 percent and 0.6 percent in Q1FY24, on the back of healthy recoveries and upgrades.
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The report adds that with continued deposit repricing likely in the upcoming quarter, they see a limited upside to margins and negligible scope for operating leverage. HDFC Securities has maintained an Add call with a revised target price of Rs 150.
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