Karnataka Bank shares slip, pausing 3-day rally; what's next?

Shares of Karnataka Bank Ltd declined in Friday's trade, snapping a three-session winning streak. The stock fell 1.97 per cent to trade at Rs 265.60 at last check.

Anand Rathi said Karnataka Bank delivered a strong performance in Q4 FY26, with improvement across key operating parameters including growth, margin and asset quality.

"Advances growth accelerated to 6.9 per cent y/y in Q4 FY26 (vs. -1 per cent q/q in Q3 FY26), led by strong traction in corporate loans, while the management has guided for 15-20 per cent growth in FY27. NIM improved 15bps q/q to 3.07 per cent, driven by higher yields and lower cost of funds, while lower opex and moderate credit cost supported profitability. Looking ahead, the management expects margin to remain broadly stable, supported by a favourable shift in loan mix towards higher-yielding segments," the brokerage added.

"Asset quality also improved sharply, with GNPA declining by 54bps q/q on the back of sharply lower slippages, while PCR improved by 417bps q/q. With stable margin, controlled opex and healthy asset quality, we expect RoA to sustain near 1% over the medium-term. We maintain BUY on Karnataka Bank with a 12-month TP (target price) of Rs 330, valuing the stock at 0.8x FY28e P/BV," it further stated.

Kranthi Bathini, Director of Equity Strategy at WealthMills Securities, noted, "Investors holding the stock should continue with their positions and for fresh buying, one should consider buying on dips."

From a technical standpoint, some analysts suggested the broader trend remains positive despite today's decline.

Ravi Singh, Chief Research Officer at Mastertrust, said, "Karnataka Bank has shown a strong recovery on the charts after bouncing back from the Rs 245–250 zone, with the stock currently trading near Rs 265. The overall structure remains positive as the stock continues to maintain a pattern of higher highs and higher lows. Rs 272–275 is the immediate resistance area. A breakout above this zone may open room for Rs 285–295 levels. On the downside, Rs 250–252 remains an important support area and should be watched closely."

According to AR Ramachandran, Sebi-registered research analyst at Tips2trades, "Karnataka Bank's stock is bullish on daily charts with strong support at Rs 247.7. A daily close above the resistance of Rs 270 could lead to an upside target of Rs 295.4 in the near term."