Karur Vysya Bank Q3 Results Review —  Reasonably Steady Outcome Given Backdrop; Yes Securities Retains 'Buy'

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Yes Securities Report

We maintain ‘Buy’ rating on Karur Vysya Bank Ltd. with an unchanged price target of Rs 270.

Asset Quality – Gross slippages decline materially on sequential basis, indicative of sound underlying asset quality:

Gross NPA additions amounted to Rs 1.39 billion for Q3 FY25, translating to an annualized slippage ratio of 0.7% for the quarter, down - 23 bps QoQ. Gross slippage ratio had amounted to Rs 1.81 billion in Q2 FY25. Recoveries from technically written off accounts amounted to Rs 1.75 billion for the quarter. Provisions were Rs 1.47 billion, down by -18.0% QoQ and -1.5% YoY, translating to calculated annualised credit cost of 73 bps.

This low credit figure contains entirely prudential provisions worth Rs 0.17 billion made on restructured assets and the usual prudential provision Rs 0.25 billion being made every quarter.

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