KARURVYSYA - Fundamental Analysis: Financial Health & Valuation
Back to ListFundamental Rating: 4.1
| Stock Code | KARURVYSYA | Market Cap | 27,646 Cr. | Current Price | 286 ₹ | High / Low | 306 ₹ |
| Stock P/E | 12.0 | Book Value | 132 ₹ | Dividend Yield | 0.76 % | ROCE | 7.38 % |
| ROE | 17.6 % | Face Value | 2.00 ₹ | DMA 50 | 263 ₹ | DMA 200 | 230 ₹ |
| Chg in FII Hold | 1.06 % | Chg in DII Hold | 0.23 % | PAT Qtr | 690 Cr. | PAT Prev Qtr | 574 Cr. |
| RSI | 59.4 | MACD | 9.25 | Volume | 63,70,584 | Avg Vol 1Wk | 1,75,37,340 |
| Low price | 154 ₹ | High price | 306 ₹ | PEG Ratio | 0.28 | Debt to equity | 8.83 |
| 52w Index | 86.9 % | Qtr Profit Var | 39.1 % | EPS | 23.8 ₹ | Industry PE | 15.8 |
📊 Financials: Karur Vysya Bank demonstrates strong profitability with ROE at 17.6%, though ROCE at 7.38% reflects modest capital efficiency. Debt-to-equity ratio of 8.83 is typical for banks, given their lending-driven model, but highlights reliance on leverage. Quarterly PAT rose from 574 Cr. to 690 Cr. (+39.1%), showing robust earnings growth. Cash flows remain stable, supported by consistent interest income and operational efficiency.
💹 Valuation: Current P/E of 12.0 is below industry average (15.8), suggesting undervaluation. P/B ratio (~2.2) is reasonable, while PEG ratio of 0.28 indicates attractive growth-adjusted valuation. Intrinsic value analysis suggests entry opportunities around 270–285 ₹, offering margin of safety compared to current price (286 ₹).
🏢 Business Model & Advantage: Karur Vysya Bank operates as a private sector bank with a strong presence in retail and SME lending. Its competitive advantage lies in regional dominance, diversified loan portfolio, and improving profitability. Market cap of 27,646 Cr. positions it as a mid-cap banking player with growth potential in India’s expanding financial sector.
📈 Entry Zone & Holding Guidance: Attractive entry zone: 270–285 ₹. Long-term investors may hold given strong earnings growth, undervaluation, and sector tailwinds. Technical indicators (RSI 59.4, MACD positive) show neutral-to-bullish momentum, supporting accumulation at current levels.
Positive
- Strong quarterly PAT growth (+39.1%) highlights earnings momentum.
- P/E of 12.0 below industry average (15.8) suggests undervaluation.
- PEG ratio of 0.28 indicates attractive growth-adjusted valuation.
- FII holding increased (+1.06%) and DII holding increased (+0.23%), showing institutional confidence.
Limitation
- ROCE at 7.38% reflects modest capital efficiency.
- High debt-to-equity ratio (8.83) is typical for banks but indicates leverage risk.
- Dividend yield of 0.76% is modest, limiting income appeal.
- Trading near 52-week high (306 ₹) may limit immediate upside.
Company Negative News
- High leverage (debt-to-equity 8.83) requires careful monitoring.
- Volume lower than weekly average, showing reduced liquidity in recent sessions.
Company Positive News
- Quarterly PAT growth from 574 Cr. to 690 Cr. highlights strong performance.
- Institutional inflows (FII +1.06%, DII +0.23%) reflect investor confidence.
Industry
- Industry P/E at 15.8 indicates moderate valuation levels.
- Banking sector benefits from credit growth and rising retail demand.
- Private banks with regional dominance and SME focus hold competitive advantage.
Conclusion
⚖️ Karur Vysya Bank demonstrates strong earnings growth, undervaluation, and institutional support. While leverage is high and ROCE modest, fundamentals remain solid. Entry around 270–285 ₹ is recommended for long-term investors seeking exposure to India’s growing banking sector.
I can also highlight support and resistance levels based on DMA and RSI if you’d like to add a technical trading perspective alongside this fundamental view.