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Informist, Tuesday, Apr. 22, 2025

By Pratiksha

NEW DELHI - Karur Vysya Bank Ltd.'s net profit is seen rising 7.2% on year to INR 4.89 billion for the quarter ended March on the back of steady loan growth and stable asset quality, according to an average of estimates from seven brokerages. The bank reported a net profit of INR 4.56 billion a year ago, and INR 4.96 billion in the previous quarter. 

The estimates for the net profit of the bank in Jan-Mar range from INR 4.53 billion to INR 5.37 billion. The schedule for Karur Vysya Bank's earnings for the March quarter is not out yet. The Tamil Nadu-based bank's advances rose 13.52% on year to INR 844.86 billion as of Mar. 31, according to provisional figures released by the bank on Apr. 1. 

"We expect an unchanged headline gross and net NPL (non-performing loan) ratio but slippages are likely to be at 1.2% (INR 2.5 billion) with no major concerns on commentary on asset quality," Kotak Institutional Equities said in a pre-earnings report. In the previous quarter, the lender reported an improvement in asset quality, with the gross non-performing assets ratio declining to 0.83% as of Dec. 31 from 1.10% a quarter ago, and the net bad loan ratio easing by 8 basis points to 0.20% as of Dec. 31.

The bank's net interest income is seen rising 9.4% on year to INR 10.89 billion in the quarter ended March, according to an average of estimates of the seven brokerages. "NII growth will be slightly slower than average loan growth due to rise in cost of deposits outpacing yield on advances. Consequently, NIM will be lower sequentially," YES Securities said in a pre-earnings report. 

Most brokerage firms expect the private bank's net interest margin to decline in Jan-Mar. Equirius Securities expects the bank's net interest margin to fall to 3.9% in the March quarter from 4.0% in the December quarter, and 4.2% a year ago.  

YES Securities expects the lender's slippages to be higher on a sequential basis and provisions to be broadly stable. In Oct-Dec, the bank's provisions and contingencies were down 1.5% on year at INR 1.47 billion. Slippages in the previous quarter were at INR 1.39 billion. 

The management's commentary strategy and guidance for growth and net interest margins in the next few quarters and asset quality trends will be watched out, Equirius Securities said. Shares of Karur Vysya Bank ended 0.7% higher at INR 226.17 on the National Stock Exchange of India. Following are the Jan-Mar earnings estimates for Karur Vysya Bank based on reports from seven brokerage firms in descending order by the estimate of net profit:

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Edited by Vandana Hingorani

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