Karnataka Bank Q1 Results Review - Advances Growth To Pick Up; Asset Quality Improved: Axis Securities

BQ Prime’s special research section collates quality and in-depth equity and economy research reports from across India’s top brokerages, asset managers and research agencies. These reports offer BQ Prime’s subscribers an opportunity to expand their understanding of companies, sectors and the economy..Axis Securities Report.With potential hiring expected for expansion plans, we believe, Karnataka Bank Ltd.'s cost-income ratio would inch up to 49-50% in the near term. Thus, with opex expected to uptick, pre-provision operating profit would remain under pressure. Slippages are expected to remain at current levels and non-performing asset is to report at 1.2% for FY24. Thus credit cost is expected to remain stable, thereby aiding profitability. We believe healthy advances in growth, stable margins, and better asset quality would offset the impact of the increase in opex. Thus, we remain confident in the bank’s ability to report a sustainable return on asset of +1.2% over FY24-25E. .Valuation and recommendation: Karnataka Bank presently trades at 0.7 FY25E adjusted book value, however, with growth prospects intact, we maintain our ‘Buy’ rating on the stock with a revised target price of Rs 250/share (0.8 times FY25E ABV), implying an upside of 16% from the current market price..Click on the attachment to read the full report:.IDFC First Bank Q1 Results Review - Robust Fee Income Boost Earnings; Asset Quality Steady: Motilal Oswal.DISCLAIMERThis report is authored by an external party. BQ Prime does not vouch for the accuracy of its contents nor is responsible for them in any way. The contents of this section do not constitute investment advice. For that you must always consult an expert based on your individual needs. The views expressed in the report are that of the author entity and do not represent the views of BQ Prime..Users have no license to copy, modify, or distribute the content without permission of the Original Owner.

Karnataka Bank Q1 Results Review - Advances Growth To Pick Up; Asset Quality Improved: Axis Securities

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