Karur Vysya Bank Can Rally 23% Says ICICI Securities Maintaining 'Buy' —Check Target Price

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ICICI Securities Report

We hosted Karur Vysya Bank’s senior management in Chennai. Investors discussions were centred around the SME portfolio’s health, especially export-oriented units amidst higher US tariffs and change, if any, in the operating environment for the SME units.

Karur Vysya Bank has conducted a thorough review of its SME portfolio. The overall Exposure at Impact for all industries’ export to US is ~1.2% of the overall loans.

Further, exposure to U.S., where U.S. contributes to over 60% of annual turnover, is contained at 0.56% of the total loans. Within this, textile exposure (above 60% export to U.S.) stands lower at ~0.3% of the loans.

In our view, the first order impact appears manageable. Although we would closely monitor the second order impact, if any. Our estimates are unchanged.

Maintain Buy with an unchanged target price of Rs 267, valuing the stock at ~1.65x FY27E adjusted book value.

Key risk is adverse impact on portfolio quality as well as growth amidst macro uncertainties.

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