1. At a Glance
Karur Vysya Bank (KVB) just dropped its Q1 FY26 results like a surprise bonus in an IT company—unexpected, quiet, and decently fat. Net profit clocked in at ₹521 Cr, NIMs stayed strong, NPAs kept ghosting, and oh—they’re throwing in a 1:5 bonus issue. What’s not to like?
2. Introduction with Hook
Imagine your grandfather’s 100-year-old savings account morphing into a Ferrari overnight. That’s Karur Vysya Bank for you—a legacy Tamil Nadu bank that decided not to retire, but to enter a mid-life crisis and hit the gas pedal on profit growth. Over the last 5 years, profits have compounded at 52% CAGR, and stock has grown 70% CAGR in 3 years. If that doesn’t scream “late bloomer,” what does?
3. Business Model (WTF Do They Even Do?)
KVB does… banking. Shocking, right?
- Retail Banking (64%) – Your usual EMIs, savings accounts, and “Sir, you are pre-approved for a loan” calls.
- Corporate Banking (18%) – Lending to companies and pretending they’ll pay back.
- Treasury Ops (17%) – Government bonds, mutual funds, and other “IYKYK” financial wizardry.
- Other Banking Ops (1%) – Bancassurance, demat, and a bit of financial side hustle.
Basically, KVB is your all-in-one financial supermarket. Just without the fancy ambient music.
4. Financials Overview
Q1 FY26 Snapshot:
| Metric | Q1 FY26 | YoY Growth |
|---|---|---|
| Revenue | ₹2,569 Cr | +36% |
| Net Profit | ₹521 Cr | +45% |
| EPS | ₹6.48 | Up from ₹4.47 last year |
| Gross NPA | 0.66% | From 1.99% in Q1 FY25 |
| Net NPA | 0.19% | From 0.59% in Q1 FY25 |
Commentary:
Margins are better than Bangalore real estate. NPAs have vanished faster than your salary on Swiggy. And EPS? Growing like your neighbor’s kid—annoyingly fast.
5. Valuation
KVB is trading at 10.9x P/E, with a P/B of 1.83x. That’s bargain-bin pricing compared to other private banks.
Let’s run two quick methods:
- P/E Method: Sector median ~13x, apply that to ₹24.91 TTM EPS → Fair Value = ₹324
- P/B Method: Sector P/B ~2.0x, KVB’s BV = ₹148 → FV = ₹296
Fair Value Range: ₹290–₹325
If you think 22x P/E is fine, go buy Maggi at airport prices. Otherwise, this is decent value.
6. What’s Cooking – News, Triggers, Drama
- Bonus Issue: Board approved 1:5 bonus shares. Record date: Aug 26, 2025.
- Asset Quality: NPAs improving quarter after quarter—cleaner than a monk’s browsing history.
- Expansion Game: Retail loan book getting muscular.
- FII Buzz: Slowly creeping up in shareholding again.
Basically, more plot twists than a Bengali daily soap.
7. Balance Sheet
| Item | Mar 2025 |
|---|---|
| Deposits | ₹1.02 lakh Cr |
| Borrowings | ₹1,217 Cr |
| Total Liabilities | ₹1.19 lakh Cr |
| Reserves & Surplus | ₹11,769 Cr |
| Investments | ₹23,831 Cr |
| Total Assets | ₹1.19 lakh Cr |
Fun Fact:
Borrowings are lower than some fintech startups’ burn rate.
8. Cash Flow – Sab Number Game Hai
| Year | CFO | CFI | CFF | Net CF |
|---|---|---|---|---|
| FY23 | ₹1,217 Cr | ₹-1,270 Cr | ₹-178 Cr | ₹-231 Cr |
| FY24 | ₹2,954 Cr | ₹-1,296 Cr | ₹-694 Cr | ₹963 Cr |
| FY25 | ₹4,487 Cr | ₹-2,151 Cr | ₹-188 Cr | ₹2,148 Cr |
Cash flow from ops looks like your friend who suddenly cleared all loans—impressive and suspicious.
9. Ratios – Sexy or Stressy?
| Ratio | FY25 |
|---|---|
| ROE | 18% |
| ROCE | 7.39% |
| P/E | 10.9 |
| D/E | ~0.1 |
| PAT Margin | ~20% |
Verdict:
ROE is flexing like it just got out of the gym. D/E is as low as your motivation on Mondays.
10. P&L Breakdown – Show Me the Money
| Year | Revenue | EBITDA/Fin. Profit | PAT |
|---|---|---|---|
| FY23 | ₹6,517 Cr | ₹384 Cr | ₹1,106 Cr |
| FY24 | ₹8,204 Cr | ₹542 Cr | ₹1,605 Cr |
| FY25 | ₹9,678 Cr | ₹761 Cr | ₹1,942 Cr |
Note:
PAT has nearly doubled in 2 years. Not even your gym subscription gets that kind of ROI.
11. Peer Comparison
| Bank | CMP | P/E | ROE | PAT (TTM) | NIM (%) |
|---|---|---|---|---|---|
| HDFC Bank | ₹2,014 | 21.9 | 14.4% | ₹70,575 Cr | ~4.0 |
| ICICI Bank | ₹1,483 | 20.0 | 18.0% | ₹52,890 Cr | ~4.5 |
| IDBI Bank | ₹97 | 13.1 | 13.5% | ₹7,915 Cr | ~3.8 |
| Karur Vysya Bank | ₹271 | 10.9 | 17.7% | ₹2,004 Cr | ~4.2 |
KVB = The least drunk guest at the PSU vs Pvt bank wedding. Surprisingly stable and sharp.
12. Miscellaneous – Shareholding, Promoters
| Category | Mar 2023 | Jun 2025 |
|---|---|---|
| Promoters | 2.24% | 2.10% |
| FIIs | 17.93% | 15.41% |
| DIIs | 30.80% | 39.47% |
| Public | 49.02% | 43.00% |
Key Points:
- Promoters practically MIA.
- DIIs love story brewing—stake increased consistently.
- Bonus issue in Q2 FY26 adds spice to the equity structure.
13. EduInvesting Verdict™
Karur Vysya Bank is the banking equivalent of an old Maruti 800 that now runs on EV tech—old roots, new engine, and surprisingly zippy. It’s not HDFC. It’s not trying to be. But with improving NPAs, steady profit growth, and a decent valuation, it’s doing the private bank thing with quiet confidence.
A reliable pit stop in the chaotic highway of financial services—but don’t expect business class legroom.
Written by EduInvesting Team | 24 July 2025
Tags: Karur Vysya Bank, Private Banks, Analysis, EduInvesting Premium
