Karnataka Bank - Q2FY21 Results - Angel Broking

Mr. Jaikishan Parmar - Sr. Equity Research Analyst, Angel Broking Ltd

"Karnataka Bank reported a mixed set of numbers for Q2FY21. Advance largely remained stable YoY and QoQ, growth primarily comes from retail and mid-size corporate. Management Indicated for FY21 advance would remain stable, retail and mid-size corporate book would grow but the large corporate book to decline. NII grew at a healthy rate of 15% YoY and 7% QoQ, compared to stable advance growth. Sequentially NIM improved 19 bps and YoY jumped by 26bps to 3.08%. Improvement in NIM primarily led by a decline in the cost of funds. PAT grew at 12.8% YOY & plunged 39.2% QOQ to Rs119.4cr. Banks Moratorium book declined from 51.12% in Q1FY21 to 11.40% in Q2FY21. The aggregate COVID-19 provision of Rs 97.99 crore has been continued in Q2FY21. The COVID provision is less compared to other banks. Currently, Karnataka Bank is trading at 0.22x of trailing book value, Which is lower compared to the historical average. Almost no growth in advance for the last 6 quarters, low CAR ratio, and Moderate RoE for Many quarters could be the reason for depressed valuation. The stock would consolidate till the investor get clarity on restructuring percentage from the moratorium book."

Shares of KARNATAKA BANK LTD. was last trading in BSE at Rs.43.75 as compared to the previous close of Rs. 42. The total number of shares traded during the day was 436697 in over 2091 trades.

The stock hit an intraday high of Rs. 44.55 and intraday low of 43.1. The net turnover during the day was Rs. 19104175.

Source : Equity Bulls

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