Karur Vysya Bank shares jump following strong Q1; brokerage raises earnings estimates, check target price
Nuvama Institutional Equities said KVB continued to deliver "best-in-class" operating performance, supported by healthy credit growth, stable margins and lower provisions.
- Jul 21, 2026,
- Updated Jul 21, 2026 10:53 AM IST
Shares of Karur Vysya Bank Ltd (KVB) surged in Tuesday's trade after the private lender reported a strong June quarter (Q1 FY27) performance. The stock zoomed 10.50 per cent to hit a day high of Rs 333.
Nuvama Institutional Equities said KVB continued to deliver "best-in-class" operating performance, supported by healthy credit growth, stable margins and lower provisions.
"KVB continues to report best-in-class results with strong credit growth (17.1 per cent YoY/6 per cent QoQ), stable but healthy margins at 4.26 per cent and lower provisions, leading to 17 per cent PAT beat at Rs 760 crore/2.1 per cent RoA," the brokerage said.
The brokerage noted that the bank expects growth to remain healthy. It added that KVB has taken an MCLR hike to protect margins and expects asset quality to remain range-bound.
"We expect the bank to deliver superior RoA/RoE of ~1.6–1.9 per cent/16–19 per cent over FY27–29E, which coupled with its credible and stable management and strong capital buffer calls for premium valuation," Nuvama stated.
Highlighting the lender's asset quality, the brokerage said: "Gross slippages were significantly lower at Rs 140 crore/0.6 per cent of loans, which led to near stable GNPA ratio at 0.74 per cent (-1bp QoQ). Specific PCR remains healthy at 75 per cent, while NNPA remains the peer-best at 0.2 per cent of loans. KVB made prudent provisions to the tune of Rs 160 crore during Q4, in view of the West Asia conflict, which has been maintained in Q1."
Factoring in the better-than-expected quarterly performance, Nuvama revised its earnings forecasts upward.
"We raise our earnings estimates for FY27–29E by 11–13 per cent, and expect the bank to deliver superior RoA/RoE of around 1.6–1.9 per cent/16–19 per cent over FY27–29E," it said.
The domestic brokerage reiterated its 'Buy' rating with an unchanged 12-month target price.
"We reiterate BUY with an unchanged TP of Rs 360, valuing the stock at 1.8x June 28E ABV (adjusted book value)," it added.
Nuvama, however, flagged slower-than-expected growth and a resurgence of NPAs in the retail and SME segments due to macro or micro dislocations as key risks to its investment thesis.
Shares of Karur Vysya Bank Ltd (KVB) surged in Tuesday's trade after the private lender reported a strong June quarter (Q1 FY27) performance. The stock zoomed 10.50 per cent to hit a day high of Rs 333.
Nuvama Institutional Equities said KVB continued to deliver "best-in-class" operating performance, supported by healthy credit growth, stable margins and lower provisions.
"KVB continues to report best-in-class results with strong credit growth (17.1 per cent YoY/6 per cent QoQ), stable but healthy margins at 4.26 per cent and lower provisions, leading to 17 per cent PAT beat at Rs 760 crore/2.1 per cent RoA," the brokerage said.
The brokerage noted that the bank expects growth to remain healthy. It added that KVB has taken an MCLR hike to protect margins and expects asset quality to remain range-bound.
"We expect the bank to deliver superior RoA/RoE of ~1.6–1.9 per cent/16–19 per cent over FY27–29E, which coupled with its credible and stable management and strong capital buffer calls for premium valuation," Nuvama stated.
Highlighting the lender's asset quality, the brokerage said: "Gross slippages were significantly lower at Rs 140 crore/0.6 per cent of loans, which led to near stable GNPA ratio at 0.74 per cent (-1bp QoQ). Specific PCR remains healthy at 75 per cent, while NNPA remains the peer-best at 0.2 per cent of loans. KVB made prudent provisions to the tune of Rs 160 crore during Q4, in view of the West Asia conflict, which has been maintained in Q1."
Factoring in the better-than-expected quarterly performance, Nuvama revised its earnings forecasts upward.
"We raise our earnings estimates for FY27–29E by 11–13 per cent, and expect the bank to deliver superior RoA/RoE of around 1.6–1.9 per cent/16–19 per cent over FY27–29E," it said.
The domestic brokerage reiterated its 'Buy' rating with an unchanged 12-month target price.
"We reiterate BUY with an unchanged TP of Rs 360, valuing the stock at 1.8x June 28E ABV (adjusted book value)," it added.
Nuvama, however, flagged slower-than-expected growth and a resurgence of NPAs in the retail and SME segments due to macro or micro dislocations as key risks to its investment thesis.