Karur Vysya Bank Ltd's Q2FY19 standalone net profit rises 10.6% yoy to Rs83.70cr : Misses Estimates

The bank’s standalone NII stood at Rs579.10cr, up 4.34% yoy but down 0.77% qoq.

Oct 30, 2018 01:10 IST India Infoline Research Team

Karur Vysya Bank Ltd Q2FY19

Standalone Results Q2FY19: ( cr)

Q2FY19 YoY (%)
NII 579.10 4.3
GNPA (%) 7.7 287
Provisions 213.10 [33.7]
Net Profit (adjusted) 83.70 10.6
***GNPA change is bps
Karur Vysya Bank Q2FY19 NII came at Rs579.1cr as against Rs555cr in Q2FY18, which is up by 4.3% yoy. The bank’s net profit for the quarter came at Rs83.7cr, which is ~12% below consensus estimates and increased by 10.7% yoy against Rs75.6cr yoy. Its GNPA for Q2FY9 came at 7.7% against 7.44% qoq, which has increased by 26bps. NNPA for the quarter came at 4.41% against 4.5% qoq, which has declined by 9bps.
  • The bank’s loan book grew by 7% yoy.
  • NIMs fell by 8bps qoq and 24bps yoy as TD are repriced at a faster pace; cost to advances linked to MCLR happened with a lag. Cost of funds have gone up by 7-8bps.
  • The provision for the quarter came at Rs213.1cr as against Rs422.7cr yoy.
  • The management  is confident that the margins would improve moving ahead and downward pressure on margin will be arrested.
  • Unsecured yields in the range of 12-18%, LAP yield is in the range of 10.5% to 14-15%.
  • Steady-state credit cost would be at Rs450-500cr for slippages rate of 150bps (Rs750cr) for a year.
  • Management targets PCR in the range of 50-51%.
  • Total exposure to the group is Rs330cr comprising 2 entities.
  • Bank will take appropriate action on IL&FS exposure as more information becomes available in Q3FY19.
  • Going forward, bank expects credit growth to accelerate and be in-line with the industry growth.
  • Going forward, bank to focus more on Retail & Commercial and thereby reduce Corporate as % of total assets.
  • Corporate growth will continue to stay muted while other areas will continue to grow.

Technical View:

Karur Vysya Bank Ltd is currently trading at Rs. 76.25, up by 1.3 points or 1.73% from its previous closing of Rs. 74.95 on the BSE.
The scrip opened at Rs. 76.25 and has touched a high and low of Rs. 77.15 and Rs. 75.45 respectively. So far 22,67,541 (NSE+BSE) shares were traded on the counter. The stock is currently trading above its 200 DMA.

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