Mutual Funds Commodities Research Tax Planning IPO Our Team Contact Us    
Google
Web www.equitybulls.com
Research

| More

Karur Vysya bank (KVB IN) - Moderate loan growth, coupled with deteriorating asset quality - CSEC Research

Posted On: 2017-11-19 09:09:27

KVB's advances showed a moderate growth of 11.9% YoY(4.3% QoQ) to INR 442bn in 2QFY18. Growth in loan book was contributed by segments like Commercial (13.1%YoY) and Retail (12.0%YoY). The loan mix was noted at Corporate - 32.8%, Commercial- 34%, Agriculture- 17.6% & Retail-15.6%. Going forward the management has guided to grow the loan book at ~15% in FY18 driven by focus on Retail/ SME & Agri segment.

Deposits registered a stable growth (8.5%YoY, 3.2%QoQ) to INR 564bn, driven by growth in CASA deposits. CASA deposits grew strongly by 20.1%YoY, taking CASA ratio to 27.6% vs. 24.9% in 2QFY17. However, on a sequential basis, CASA de-grew by 2.3%, lead by 8% QoQ decline in demand (current account) deposits.

NII grew steadily by 12.1% YoY(3.1% QoQ) to INR 5.6bn lead by lower interest expense (de-growth of 5.6% YoY) on account of declining cost of funds. NIM improved by 20bps YoY to 3.81%. However, sequentially NIM grew marginally by 5bps from 3.76% in 1QFY18. Cost of funds dropped by 89bps YoY to 6.00% and Yield on advances decreased by 99bps YoY to 10.51%.

Valuation: The stock is currently trading at 2.1x P/BV of FY19E. Considering the expectations of the management on loan growth and uptrend on margin (YoY) paints a positive picture for the bank. Though the weakening asset quality remains a cause of concern, the management sounds confident of improving the same going forward. We maintain our rating of MARKETPERFORMER with a revised target price of INR 110, assigning a P/BV of 1.9X FY19E.

Risks: Slower than expected loan growth, increase in slippages might impact earnings.

Shares of KARUR VYSYA BANK LTD. was last trading in BSE at Rs.120.4 as compared to the previous close of Rs. 118.05. The total number of shares traded during the day was 94863 in over 810 trades.

The stock hit an intraday high of Rs. 121.5 and intraday low of 119.05. The net turnover during the day was Rs. 11455371.


Source: Equity Bulls

Click here to send ur comments or to feedback@equitybulls.com


Disclaimer:The article above is a gist / extract of the original report prepared by the research firm / brokerage firm. This article is not to be considered as an offer to sell or a solicitation to buy any securities. This article is meant for general information only. www.equitybulls.com, its employees or owners or the research firms, its employees or owners won't be responsible for any liability that may arise from information, errors or omissions in these articles. www.equitybulls.com or its employees or owners / the research firms or its employees or clients or owners may from time to time hold positions in securities referred in this article. For detailed research reports, please contact the concerned research firm directly.





Other Headlines:

Mid-Year FY19 Bank Outlook: Stress in Non-Corporate Segments - India Ratings and Research

View on proposed banks merger

Company Update: GHCL - BUY - TP Rs.330 - Kotak

Company Update: MIRC Electronics Ltd - BUY - TP Rs.32 - Kotak

Company Visit Note: Finolex Industries Ltd - ACCUMULATE - TP Rs.671 - Kotak

Company Update: NMDC Ltd BUY TP Rs.125 - Kotak

Company Update: Allcargo Logistics Ltd - BUY - TP Rs.145 - Kotak

Company Update: Hindustan Zinc Ltd - ACCUMULATE - TP Rs.300

Buyback Offer: Larsen & Toubro Ltd - BUY - Buyback Price Rs.1500

Result Update: Vascon Engineers Ltd - BUY - TP Rs.48 - Kotak

Result Update: Voltamp Ltd - BUY - TP Rs.1320 - Kotak

Result Update: Bodal Chemicals Ltd - REDUCE - TP Rs.130 - Kotak

Result Update: MIRC Electronics Ltd - ACCUMULATE - TP Rs.32 - Kotak

Result Update: Shankara Building Products Ltd - BUY - TP Rs.2017 - Kotak

Result Update: Dilip Buildcon Ltd - BUY - TP Rs.1276 - Kotak

Result Update: Zensar Technologies Ltd - ACCUMULATE - TP Rs.1373 - Kotak

Result Update: The India Cements Ltd - REDUCE - TP Rs.112 - Kotak

Result Update: Nagarjuna Construction Co Ltd - BUY - TP Rs.151 - Kotak

Result Update: Berger Paints Ltd - SELL - TP Rs.305 - Kotak

Result Update: Allcargo Logistics Ltd - BUY - TP Rs.145 - Kotak

Result Update: Aksharchem (India) Ltd - REDUCE - TP Rs.533 - Kotak

Result Update: AIA Engineering Ltd - SELL - TP Rs.1700 - Kotak

Result Update: Cummins India Ltd - BUY - TP Rs.785 - Kotak

Result Update: Dollar Industries Ltd - BUY - TP Rs.427 - Kotak

Result Update: KNR Constructions Ltd - BUY - TP Rs.283 - Kotak

Result Update: Finolex Industries Ltd - ACCUMULATE - TP Rs.671 - Kotak

Result Update: MOIL Ltd - BUY - TP Rs.260 - Kotak

Result Update: VRL Logistics Ltd - BUY - TP Rs.395 - Kotak

Result Update: Voltas Ltd - ACCUMULATE - TP Rs.658 - Kotak

Result Update: Va Tech Wabag Ltd - BUY - TP Rs.476 - Kotak

Result Update: Mahindra Holiday Resorts India Ltd - BUY - TP Rs.390 - Kotak

Result Update: Sterling Tools Ltd - ACCUMULATE - TP Rs.418 - Kotak

Result Update: MRPL - BUY - TP Rs.106 - Kotak

Result Update: Indraprastha Gas Ltd - SELL - TP Rs.257 - Kotak

Result Update: Engineers India Ltd - BUY - TP Rs.187 - Kotak

Initiating Coverage: Amber Enterprises - BUY - TP Rs.1145 - Kotak

Karia Can Company Ltd Q1FY19 net profit slips to Rs. 1.88 crore

Result Update: Bajaj Electricals Ltd - SELL - TP Rs.545 - Kotak

Result Update: Gabriel India Ltd - BUY - TP Rs.185 - Kotak

Result Update: Blue Star Ltd - ACCUMULATE - TP Rs.743 - Kotak

Result Update: The Phoenix Mills Ltd - ACCUMULATE - TP Rs.707 - Kotak

Result Update: NMDC Ltd - BUY - TP Rs.125 - Kotak

Result Update: National Aluminium Company Ltd - BUY - TP Rs.100 - Kotak

Result Update: PNC Infratech Ltd - BUY - TP Rs.219 - Kotak

Result Update: Insecticides India Ltd - BUY - TP Rs.892 - Kotak

Result Update: Mirza International Ltd - BUY - TP Rs.120 - Kotak

Wonderla Holidays Ltd - Kotak

Result Update: Greenply Industries Ltd - BUY - TP Rs.286 - Kotak

Result Update: Praj Industries Ltd - ACCUMULATE - TP Rs.89 - Kotak

Cholamandalam Investment & Finance Co. Ltd - Outperformer - Centrum





Website Created & Maintained by : Chennai Scripts
West Mambalam, Chennai - 600 033,
Tamil Nadu, India

disclaimer copyright © 2005 - 2018