Home / Markets / Stock Markets /  Multibagger stock: Anand Rathi has 'Buy' tag on this bank shares post Q3 results

Karnataka Bank witnessed a growth of 105% in its net profit for the third quarter ended December 2022 to 301 crore as compared to 146 crore during the same period last year. The asset quality as gross non-performing assets (NPA) declined to 3.28 % from 3.36% as compared to the sequential previous quarter and net NPA also dipped to 1.66 % from 1.72%. The provision coverage ratio (PCR) improved to 80.21% from 73.66% a year ago.

“Strong net interest income growth in Q3 and lower opex kept operating performance strong for Karnataka Bank with its C/I ratio holding below 50%. Strong PPOP combined with moderate provisions kept profitability strong with the RoA coming at 1.21%. Asset quality and PCR slightly improved. Ahead, with credit growth picking up and moderating credit costs, earnings are expected to be strong with RoA expected to stabilise at ~1%. With most of the stress already delinquent/restructured, we expect slippages to moderate from now," said the note by domestic brokerage and research firm Anand Rathi.

The brokerage house has maintained its Buy rating on Karnataka Bank shares, with a higher target price of 191 apiece. Though, risks could be, high provisioning, large slippages from its agriculture and MSME books, as per Anand Rathi.

Incorporated in 1924, Karnataka Bank Limited (KBL) – is a scheduled commercial bank under the private sector. The private bank's stock has given multibagger return in a year's period by rallying more than 121% during the period.

Announcing the results at the Bank's Head Quarters at Mangaluru, Mahabaleshwara M S, Managing Director & CEO of the Bank said, “The impressive all round performance of the Bank is on account of improved operational efficiency facilitated by various initiatives under KBL VIKAAS. NIM has improved to an all time high of 3.63% as compared to 3.15% as on 31/12/21. The consistent and stable performance has been the hallmark of the Bank, and going forward Bank will strive hard for its sustainability with higher scale."

The views and recommendations made above are those of individual analysts or broking companies, and not of Mint.

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