Hold Karur Vysya Bank, target Rs 123: Centrum Broking

Centrum Broking has a hold call on Karur Vysya Bank with a target price of Rs 123.

The current market price of Karur Vysya Bank is Rs 104.55.

Time period given by the brokerage is one year when Karur Vysya Bank price can reach the defined target.


"We have been maintaining Neutral rating on KVB due to consistently rising NPAs, which may be looked upon to as a cleanup activity by new MD & CEO Mr. P R Seshadri. As indicated by the management post Q2 & Q3, the coming 2 quarters are expected to remain weak in terms of additional slippages from stressed book as well as other corporate loans. While this may keep the profitability at a lower level, it would be positive from a long term perspective with all weak assets being addressed to. Going ahead, the management aims to increase the proportion of small-ticket retail loans to about 70-80 per cent of the total advances; thus reducing the risk of large slippages and help improve NPA position. In lieu of expected recoveries and consistently improving advances growth, we upgrade our rating on KVB from Neutral to Hold with a target price of Rs 123, valuing the stock at 2x its FY20E ABV," Centrum Broking said in a report.