Please refer to important disclosures at the end of this report
1
Karur Vysya Bank (KVB) is one of the oldest private sector banks with strong
presence in the Southern parts of India. More than 53% of KVB’s 706 branches
are located in Tami Nadu however it is gradually branching out in other parts o
f
India also. KVB’s loan book reported a healthy CAGR of 17% over FY2011-16.
Nevertheless, after slowdown in FY17 we expect the growth trajectory to pick up
from FY2018 onwards. While the bank is still largely dependent upon corporate
loans for its growth, it has been scaling up its presence in the retail loans
segment gradually. KVB’s deposits have reported a healthy 15.2% CAGR ove
r
FY2011-16. The growth in deposits got a further boost owing to demonetization.
During demonetization the bank received strong flows in the low cost CASA base
and the share of CASA in total deposits thus went up to 30.8% at the end o
f
3QFY2017 v/s 23.3% in FY2016 end. KVB’s earnings were impacted due to
higher provisions and lower business growth, however, we expect gradual
recovery on both the fronts going ahead. While in FY2018 we expect earnings
recovery to be visible, sharp growth is expected in FY2019. The company has
been maintaining a healthy dividend payout of 32.09% (Div Yield: 2.40%).
Hence Buy.
BUY
CMP `117
Stock Info
Sector
Beta
Bloomberg Code
Shareholding Pattern (%)
Promoters 2.1
MF / Banks / Indian Fls 28.9
FII / NRIs / OCBs 19.8
Indian Public / Others 49.3
Abs. (%) 3m 1yr 3yr
Sensex 12.3 18.4 32.9
KVB 42.7 31.8 60.0
.
52 Week High / Low 119/80
Avg. Daily Volume 1,52,270
Banks
Market Cap (
`
cr) 7,111
2
BSE Sensex 29,910
Nifty 9,237
Face Value (
`
)
Reuters Code KARU.BO
0.5
Vaibhav Agrawal
022 – 3935 7800 Ext: 6808
Karur Vysya Bank
Others | Banks
April 05, 2017
Karur Vysya Bank | Banks
A
pril 05, 2017
2
Research Team Tel: 022 - 39357800 E-mail: res[email protected] Website: www.angelbroking.com
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Disclosure of Interest Statement Karur Vysya Bank
1. Financial interest of research analyst or Angel or his Associate or his relative No
2. Ownership of 1% or more of the stock by research analyst or Angel or associates or relatives No
3. Served as an officer, director or employee of the company covered under Research No
4. Broking relationship with company covered under Research No
Ratings (Based on expected returns Buy (> 15%) Accumulate (5% to 15%) Neutral (-5 to 5%)
over 12 months investment
p
eriod
)
: Reduce
(
-5% to -15%
)
Sell
(
< -15