Karur Vysya Bank shares jump 6% to hit a 52-week high after Q2 results - Should you buy? Rationale, target price

Deposits increased by 15.96% YoY and 4.52% QoQ, while advances jumped 20.35% YoY and 6.60% QoQ. The bank's net interest margin (NIM) increased by 28 bps YoY to 4.34%.Should you buy Karur Vysya Bank shares?Brokerage firm Systematix Shares and Stocks (India) has maintained a buy call on the stock with a target price of ₹410, underscoring strong asset quality, stable NIM, healthy growth in advances, and improvement in profitability."Karur Vysya Bank (KVB) reported Q2FY27 PAT 3.3% above our estimates.

NIM remained stable QoQ, supported by an 8bps QoQ improvement in yield on advances. Asset quality improved, with GNPA declining by 5bps QoQ to 0.7% and NNPA declining by 1bp QoQ to 0.2%, while the annualised slippage ratio stood at 0.45%. Operating profit grew by 14% YoY," Systematix noted."Management expects NIMs to remain above 4% over the next two quarters, supported by the transmission of the 25bps repo rate hike, while acknowledging potential pricing pressure and rising funding costs.

Management reiterated its FY27 guidance of 18–20% advances growth and RoA above 2%, while targeting a cost-to-income ratio below 45% over the next two quarters," Systematix said.Brokerage firm Emkay Global Financial Services has raised its earnings estimates by 2-11%, expecting ROA to remain at nearly 2% over FY27-29E. It has reiterated a buy call on the stock, while revising up its target price by nearly 8% to ₹420 from ₹390 earlier, valuing the bank at 1.9 times Sep-28E ABV.Read all market-related news hereRead more stories by Nishant KumarDisclaimer: This article is for educational purposes only and does not constitute investment advice.

The views and recommendations expressed are those of individual analysts or broking firms, not Mint. We advise investors to consult with certified experts before making any investment decisions, as market conditions can change rapidly and circumstances may vary.