Karur Vysya Bank is an Indian private-sector bank based in Karur, Tamil Nadu. The bank operates in consumer, corporate, and investment banking segments.
The market capitalisation of Karur Vysya Bank, as of August 21, 2018, was a little over Rs.7,500 crore.
Company’s Wealth and Recent Performance
- For the quarter ended on June 30, 2018, Karur Vysya Bank reported its total income to be Rs.1,697 crore. In comparison to the June quarter of the previous year, this marks a small improvement of roughly Rs.50 crore. Of this, the net interest income for the Q1 FY19 stood at Rs.1,442.5 crore - an improvement of roughly Rs.50 crore y-o-y.
- Considering the operating profit of the bank, it was reported to be Rs.459.62 crore, as against Rs.449.4 crore reported for the same quarter of the previous year. However, provisions and contingencies for the quarter were increased drastically - the figure for the June quarter stood at Rs.422.6 crore, in comparison to a provision of Rs.233 crore disclosed for the Q1 FY18.
- Consequently, the net profit for the period came down to Rs.45.91 crore from Rs.147.97 crore, y-o-y.
- Considering the Gross Non-Performing Asset (NPA) ratio, the figure was disclosed to be 7.44% for the quarter ended June 30, 2018. This marks an increase of 3% y-o-y. The Net NPA count also increased from 2.85% to 4.50%, y-o-y.
Karur Vysya Bank Stock Trends in 2018
- On January 2, 2018, the opening share price of Karur Vysya Bank was Rs.112.72. While things didn’t change considerably in the first half of the month, the second half witnessed the shares lose 10% in value. As a result, the scrip ended the month of January at Rs.100.81 on the National Stock Exchange.
- Things were fairly stagnant in the month of February. The share price went down marginally by Rs.2 over the course of the month. In March, the price went down by another 10% to descend into the Rs.80 territory. However, the prices recovered slightly in the final week of the month to close at Rs.91.31 on March 31.
- Through the course of April, the stocks made small gains as the scrip attempted to reach its previous levels above Rs.100. The shares did come incredibly close to achieving this feat, given that the scrip ended the month of April at Rs.99.
- In May, the trend reversed completely and the shares lost close to 15%. In the same month, the shares hit their 52-week low at Rs.85.18. Once again, the prices recovered in June, although the gains made here weren’t that significant. For most of June, the shares were trading hands at levels varying from Rs.92 - Rs.98.
- In July, the company announced a final dividend of 30%. However, this didn’t help the price recover as the shares continued to be traded at levels around Rs.90. In August, the company announced Bonus shares in 1:10 ratio which did help the shares cross the Rs.100 mark.
Karur Vysya Bank Stock Trends in 2016 and 2017
- The Karur Vysya Bank shares started 2016 at levels varying around Rs.88. Over the course of first two months, the scrip lost more than 15% to descend into the Rs.70 region. In March, the bank announced an interim dividend of 100% which gave the shares a steady heading upwards. Through most of April, the stock price of Karur Vysya remained at levels above Rs.80.
- In the months of May and June, things didn’t change significantly. The shares maintained their bearings at levels varying from Rs.80 - Rs.86 for most of the time. In the final week of June, the prices rose sharply to cross the psychologically important mark of Rs.90.
- In July, the bank announced a final dividend of 40%. However, this wasn’t enough for the investors to keep the momentum going and subsequently, the price fell back into the Rs.80 region. The same was the trend through the months of August, September, and October. The share price of Karur Vysya Bank didn’t vary drastically in this period.
- Post demonetisation in November, the prices slipped into the Rs.70 territory. Around the same time, the bank announced Face Value Split. The closing price on December 30, 2016, was Rs.74.31 on the NSE.
- 2017 was a landmark year for the shareholders. The scrip started the year at levels around Rs.75 on a fairly bullish note. By mid-February, the shares were up by more than 10% and were being traded at levels above Rs.84. The stock price of Karur Vysya continued to head up with the closing price at the end of February being Rs.91.09.
- In March, the scrip crossed the Rs.100 mark and in April, the shares were seen stabilising at those levels. Through most of the month and parts of May, the stock price fluctuated at levels varying from Rs.103 - Rs.107. It wasn’t until June that the shares incurred another meteoric rise and this time, the scrip moved up by 30% in just two weeks. The closing price at the end of June was Rs.131.54.
- The share price went down marginally in July, although the stocks still maintained their bearings at levels above Rs.120. A final dividend of 130% was also announced in the same month. In early September, the prices rose once again and this time, they hit the 52-week high at Rs.136.70. In fact, for a few days in September, the shares were traded at levels above Rs.140.
- This rise, however, was followed by a gradual drop in the share prices. By the end of the year, the scrip had lost a little over 20%, thus effectively negating the gains made in the months of June through September. The closing price at the end of the year was Rs.113.81.
Should you invest in Karur Vysya Bank Limited?
- Karur Vysya Bank Limited is an India private bank headquartered in Karur, Tamil Nadu. It provides an array of financial and banking services across a broad spectrum of segments like corporate, retail, personal, and NRI. It is one of the oldest banks in the country.
- Considering the financial performance of the bank for the June quarter of the current fiscal, the bank reported a decline of more than 60% in its net profit. The actual figure at the end of June 30, 2018, stood at Rs.45.91 crore as against Rs.147.9 crore reported for the same quarter, last year. This drop in profit came on the account of higher provisions and contingencies.
- However, its total income went up by around 4.5% y-o-y. The provisions for the period almost doubled in this period from Rs.233.4 crore to Rs.422.6 crore, y-o-y. The higher provision may have been driven an increase in the Gross NPA ratio - the final figure stood at 7.44% as against 6.56% a year ago.
- If we are to look at the performance of the stock over the course of last three years, 2016 was a dull year for the investors whereas 2017 delivered excellent returns. However, in 2018, the scrip has been highly bearish and has shed most of the gains that the stocks made in the previous year. The stock, as of late August, is trading at around Rs.96 which may make it an attractive buy.
- At the same time, there are other private banks in the sector which have been performing considerably well in terms of profit, net interest income, and NPA count. As an investor, you may want to look at these banks. Whatever may be the case, it is strongly recommended that you do your own research before investing.
Karur Vysya Bank Limited is an Indian private bank which is engaged in the business of providing financial products and services. The major segments in which the bank primarily operates are personal, corporate, agricultural, NRI, and Micro, Small, and Medium Enterprises (MSME). It provides loan services along with other features such as cards, deposits, insurance, Demat, mutual funds, locker, accounts, et cetera.
History of the Company
The roots of Karur Vysya Bank Limited can be traced back to the year 1916, when Late Mr. M. A. Venkatarama Chettiar and Late Mr. Athi Krishna Chettiar set up the bank. The idea behind the bank was to promote the habit of saving and provide general financial assistance and services to the people in and around Karur. Over the course of several decades, the bank continued to provide financial services while expanding its operations. Eventually, the bank moved on to establish more than 650 branches across the country.
Management of the Company
Mr. P. R. Sheshadri - Managing Director, Chief Executive Officer
Mr. P. R. Sheshadri presently serves as the Managing Director and Chief Executive Officer of the Karur Vysya Bank. In addition to this, he also serves as an Additional Director on the Board. He has been a part of the banking sector for more than 25 years and has held various positions across different geographies. Mr. Sheshadri started his career with Citibank N.A. India in 1992 and worked with the organisation till 2005. He was instrumental in success of the bank’s business in India and in his final two years with the company, he served as the Managing Director of Citi Financial Consumer Finance Limited. He also led the Citibank’s Lending Business Division across Asia/Pacific. He finished his Bachelor’s in Engineering from the Delhi College of Engineering and followed it with a Post Graduate Diploma in Management from the Indian Institute of Management, Bangalore.
Mr. N. S. Srinath - Non-Executive Independent Director
Mr. N. S. Srinath is a veteran of the banking industry, having worked in this field for more than 35 years. He presently serves as a Non-Executive Independent Director of Karur Vysya Bank Limited. He started his career with the Canara Bank back in the 1970 and over the years, he worked in the areas of information technology, projects, HRD, and banking operations. He also served as the Executive Director of Bank of Baroda from December 2009 to May 2012. In addition to this, he was also on the Board of Bank of Baroda Trinidad and Tobago Limited and Bank of Baroda Ghana Limited.
Mr. B. Swaminathan - Part-time Non-Executive Independent Chairman
Mr. B. Swaminathan currently serves as the Non-Executive Independent Chairman (Part-time) of the Board at Karur Vysya Bank Limited. He started his career with the Indian Overseas Bank back in 1968 and subsequently moved up in the ranks to be appointed as the General Manager. He is significantly experienced in banking and is also a Certified Associate of the Indian Institute of Bankers, Mumbai. He also served as a Director on the Board of erstwhile Bharat Overseas Bank and as an Executive Director of Canara Bank. He was also the Managing Director and Chief Executive Officer of erstwhile Lord Krishna Bank.
Karur Vysya Bank Listings in NSE, BSE, and Stock Market Indices
The equity shares of Karur Vysya Bank are available to the general public for trading. The shares are listed on the National Stock Exchange of India Limited and the Stock Exchange, Mumbai. The call signs for the same are as follows:
- NSE Code: KARURVYSYAEQ
- BSE Code: 590003
- ISIN: INE036D01028
- Sector: Banks - Private
Coming to the stock market indices, Karur Vysya Bank comprises the following:
- Nifty 200
- Nifty 500
- Nifty Dividend Opportunities 50
- Nifty LargeMidCap 250
- Nifty Midcap 150
- Nifty Midcap 100
- Nifty MidSmallCap 400
The Karur Vysya Bank Limited
P.O. Box No. 21
Karur - 639002
Tamil Nadu, India
Contact number: 04324-225514
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