Buy Karnataka Bank, target price Rs 285: ICICI Direct
Karnataka Bank with a target price of Rs 285. The current market price of Karnataka Bank is Rs 242.25.
Time period given by analyst is 6-12 months when Karnataka Bank price can reach defined target.
Karnataka Bank, incorporated in the year 1924, is a banking company (having a market cap of Rs 7574.85 Crore).
Karnataka Bank key Products/Revenue Segments include Interest & Discount on Advances & Bills, Income From Investment, Interest and Interest On Balances with RBI and Other Inter-Bank Funds for the year ending 31-Mar-2023.
Financials
For the quarter ended 30-06-2023, the company has reported a Consolidated Total Income of Rs 2282.59 Crore, down -3.47 % from last quarter Total Income of Rs 2364.54 Crore and up 29.55 % from last year same quarter Total Income of Rs 1761.87 Crore. The bank has reported net profit after tax of Rs 370.73 Crore in latest quarter.
Investment Rationale
Strategy to harness core competency with focus on geographic & product expansion along with investment in digital technology is expected to aid growth and asset quality.
Steady margins and prudent asset quality is expected to offset higher opex thereby sustaining RoA at ~1.2% in FY24-25E. At CMP, the stock is trading 0.7x FY25E ABV which seems relatively lower.
Promoter/FII Holdings Promoters held 0 per cent stake in the company as of 30-Jun-2023, while FIIs owned 21.03 per cent, DIIs 6 per cent.
