Accumulate Karur Vysya Bank Ltd. - Dolat Capital

We have preference for Karur Vysya Bank's given its prudent credit book expansion on the back of robust understanding of local & regional business environment helps the bank maintain its asset quality

- We maintain KVB's loan book to grow at 26% CAGR during FY12-FY14E with key focus area continuing to be retail trade, whole-sale trade, SME and agriculture sectors. We also expect the bank's margin to remain stable in 2.80%-2.85% range

- We expect KVB's GNPA ratio to taper off from the current level mainly on the back of early signs of drift in gross slippages and higher NPA recoveries

- Valuations at 1.6x P/ABV FY13E and 1.4x P/ABV FY14E have scope to re rate, in our opinion over the medium term.

Source : Equity Bulls

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