Karur Vysya Bank Q4 Results Review: Investment Thesis Intact Despite Weak NIM Guidance, Says ICICI Securities

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ICICI Securities Report

Karur Vysya Bank Ltd. reported a steady and strong quarter with Q4 FY25 PAT of Rs 5.13 billion, up 13% YoY (3% beat). RoA was broadly unchanged QoQ, at 1.73%, for the quarter; for FY25, it was up 9 bps to 1.72%. Granular (risk assessment model) growth remains strong at ~20% YoY, though overall growth was restricted to 14% YoY due to a conscious shedding of corporate (down 14% YoY).

Cost of deposits inched up but so did yields; thus, NIM was up 2bps QoQ to 4.05% (against guidance of ~15bps decline QoQ). Karur Vysya Bank continues to guide conservatively on net interest margin (down 30–40bps YoY for FY26).

Tier1 remains strong at >17%. Our estimates are broadly unchanged and we expect the bank to deliver strong ~1.6%/16% RoA/RoE for FY26E/FY27E. Maintain Buy with an unchanged target price of Rs 300.

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