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 |
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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.
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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.
