Comments
Chola Securities
KVB (Marketperformer)
CMP: ₹98
Target: ₹112
During 1QFY19, KVB’s advances, showed a moderate growth of 12.9 per cent y-o-y (4.2 per cent q-o-q) to ₹47,900 crore (beating CSEC estimate of ₹46,600 crore). Growth was predominantly led by retail (24.9 per cent y-o-y), and commercial (14.6 per cent y-o-y) segments. The loan mix was noted at corporate 31 per cent, commercial 34 per cent, agriculture and retail, contributing about17 per cent each.
Valuation: . Although KVB’s asset quality remains weak, the management sounds confident of improving the same going forward. Also there are signs of improvements in liability franchise, with higher share coming from CASA owing to digitisation, which will have a positive impact on the NIMs. We maintain our target price to ₹112, assigning a P/ABV of 1.1X FY20E and rate the stock a Marketperformer.
Risks: Slower than expected loan growth, increase in slippages might impact earnings.
Comments
COMMENT NOW
Comments
Comments have to be in English, and in full sentences. They cannot be abusive or personal. Please abide by our community guidelines for posting your comments.
We have migrated to a new commenting platform. If you are already a registered user of TheHindu Businessline and logged in, you may continue to engage with our articles. If you do not have an account please register and login to post comments. Users can access their older comments by logging into their accounts on Vuukle.