Karur Vysya Bank had been worst affected during current economic slowdown. The bank witnessed slowing credit growth coupled with rise in cost of funds resulting in decline in margins. Additionally, sudden monetary tightening during July 2013 brought in treasury losses for the bank and as a result the bank witnessed decline in profits during 9MFY14 on y-o-y basis. Although worst may not be over for the bank, we believe that the bank would be major beneficiary during improving economic conditions. KVB would be able to ramp up its credit growth faster with presence in consortium and expertise in SME/MSME lending. There is also scope for margin improvement and reversal of treasury losses, in case of monetary easing phase. bank is trading an attractive entry point with favourable risk-reward scenario.