Karur Vysya Bank-One Of the Finest Private Sector Banks In India Market Cap-Rs 4000 cr approx, EPS Rs 60; Cum Dividend Rs 12 per share In Q4FY10, Karur Vysya Bank (KVB) reported financial performance in-line with our estimates on core income level and better than expectation on bottomline level. KVB's net interest income grew by 44% (Y/Y) to Rs1.64 bn (in-line with our estimates) and bottomline increased by 18% (Y/Y) to Rs989 mn compared to our estimate of Rs861 mn.
We maintain our earning estimates and price target; we rate the stock as a BUY with a target price of Rs749 at 1.92x adjusted book value FY12.
Some of key positives of the quarterly results were robust growth of 37% (Y/Y) in CASA deposits to Rs45 bn and improvement in margin to 3.37% from 3.32% in Q4FY09.
Robust growth in business: In Q4FY10, the bank reported 29% (Y/Y) growth in totalbusiness on the back of 31.4% (Y/Y) growth in net advances and 27.6% (Y/Y) in deposits.
In deposits, growth mainly came from CASA deposits; current and saving deposits grew by 36.6% and 37% (Y/Y) respectively. As on end-March 10, current and saving deposits contribute 10.6% and 12.9% to total deposits; whole-sale deposits (including certificate of deposits) were almost 25% of total deposits with average cost much below the bank's retail term deposit card rate. Under the gross advances, major sectors contributing growth were infrastructure and SME. Safe Harbor Statement: Some forward looking statements on projections, estimates, expectations & outlook are included to enable a better comprehension of the Company prospects. Actual results may, however, differ materially from those stated on account of factors such as changes in government regulations, tax regimes, economic developments within India and the countries within which the Company conducts its business, exchange rate and interest rate movements, impact of competing products and their pricing, product demand and supply constraints. Nothing in this article is, or should be construed as, investment advice. --- On Thu, 7/8/10, moderator.plethora@
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