Reduce Karur Vysya Bank; target of Rs 38: HDFC Securities

HDFC Securities' research report on Karur Vysya Bank

KVB’s 2QFY21 earnings were ahead of estimates as provisions were lower than expected. While the bank’s collection efficiency improved, reaching levels reported by many large stronger banks, disclosures on this front were a little ambiguous. Further, we believe that the proportion of COVID-19 related provisions is low, relative potential stress. Provisions are, therefore, likely to remain elevated as stress manifests, keeping return ratios depressed.

Outlook

This drives our REDUCE rating (target price of Rs 38).

For all recommendations report, click here

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