📌 At a Glance:
| Metric | FY25 | FY24 | YoY Change |
|---|---|---|---|
| Total Income | ₹1,15,076 Cr | ₹94,647 Cr | +21.6% |
| Net Profit (PAT) | ₹1,941 Cr | ₹1,362 Cr | +42.5% |
| EPS (Diluted) | ₹24.12 | ₹16.93 | +42.4% |
| Gross NPA % | 0.76% | 1.68% | Improved |
| Net NPA % | 0.20% | 0.62% | Improved |
| Return on Assets (RoA) | 1.72% | 1.24% | +48 bps |
| CET-1 Ratio | 18.17% | 16.8% | Strong |
| CMP (Trendlyne) | ₹181.75 | As of May 19, 2025 | |
| 🧠 FV Target (EduCalc™) | ₹290.00 | ~60% Upside |
🏢 About Karur Vysya Bank
Founded in 1916, KVB is a 100+ year old private sector bank based in Tamil Nadu — but often mistaken for a PSU thanks to its name, customer base, and logo aesthetics. It operates in:
- Retail & Corporate Banking
- Treasury
- Digital Banking
- SME & MSME Lending
It has a high focus on Tier 2–3 cities, operates like a desi regional warrior, and somehow manages to stay profitable, clean, and scandal-free — a rare combo in Indian banking.
🧮 Forward Value (FV) Calculation
Let’s calculate the fair value like a sober fund manager sipping filter coffee:
- EPS (FY25): ₹24.12
- Conservative P/E: 12x (industry avg for regional banks)
- 🎯 FV = ₹24.12 × 12 = ₹289.44
🟩 CMP: ₹181.75 → 📈 Upside Potential = ~59%
🧠 Verdict: Fair value shows this stock is deeply undervalued relative to earnings. And this isn’t a PSU, so rerating is fair game.
📊 Segmental Performance Highlights
| Segment | Revenue (₹ Cr) | PBT (₹ Cr) |
|---|---|---|
| Treasury | ₹17,450 | ₹4,018 |
| Corporate Banking | ₹20,547 | ₹6,530 |
| Other Retail Banking | ₹75,321 | ₹23,692 |
| Digital Banking | ₹0.6 | -₹0.39 |
| Other Banking Ops | ₹1,757 | ₹1,359 |
Retail is the hero, digital is the baby cousin still learning alphabets.
🧠 EduInvesting Take
“KVB is like the M.S. Dhoni of banks — consistent, underrated, and doesn’t show off. But delivers.”
- Profit up 42%
- NPA down to near-zero levels
- Operating profit: ₹3,212 Cr
- CET1 ratio: 18.17% = insanely good buffer
- EPS growth: 40%+
The bank has almost zero NPA drama, a clean lending book, and no over-reliance on risky corporate loans.
🧯 Risks & Red Flags
- Loan growth slowdown: FY25 was strong, but future quarters might face macro headwinds.
- Rural exposure risk: Any monsoon impact or agri stress can hit asset quality.
- Small bank, limited rerating: Needs a catalyst (FD boost, merger talks?) to break ₹300+
🔮 Growth Outlook
- Focus on SME and retail secured lending — highest NIM segments
- Strong CASA ratios maintained despite rising interest rates
- Expanding digital footprint — could help cut OPEX and improve reach
- No aggressive infra lending = less exposure to volatile sectors
💸 Dividend Update
No final dividend announced yet for FY25, but interim payouts continue — FY24 was ₹2/share. With ₹1,941 Cr PAT, a ₹4/share total payout looks likely if payout ratio is kept at 30–35%.
🏁 Final Verdict
KVB is like that quiet topper from a Tier 2 town — doesn’t attend the parties, but consistently outperforms.
✅ EPS at ₹24
✅ P/E of 7.5
✅ CMP ₹181
✅ FV ₹290
If this doesn’t scream “undervalued”, nothing does.
Add it. SIP it. Forget it. Let the rerating do its magic.
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