Shares of Karnataka Bank gained strongly in Monday's trade after the bank reported an impressive performance for Q4 FY23. The private sector bank on May 26 reported a 171.53% jump in net profit to ₹353.53 crore, ending FY23 with a record annual consolidated net profit of ₹1,179.68 crore.
In FY22, the bank recorded a consolidated net profit of ₹509 crore. During the second quarter of FY23, the bank posted its highest-ever net profit of ₹411.63 crore.
The bank recorded a business turnover of Rs. 1,47,319.53 crore for the financial year ending March 31, FY23, marking a growth of 7.40% compared to the previous year.
Deposits witnessed a year-on-year increase of 8.68%, reaching Rs. 87,367.91 crore, while advances saw a growth of 5.58% to reach Rs. 59,951.62 crore. Notably, CASA deposits comprised 32.97% of the total deposit base.
Its net interest income grew by 31% to ₹860 crore during the quarter from ₹656.50 crore in the year-ago period. The net interest margin (NIM) of the bank rose to 3.87% during Q4, compared to 3.25% in the March 2022 quarter.
The bank's other income showed a considerable increase of 92.68% QoQ to ₹395 crore in Q4. In the previous quarter (Q3 FY23), the bank reported other income of ₹205 crore.
The bank's asset quality improved in the March quarter as its gross non-performing assets declined to 3.74% from 3.90% in Q4FY22 and its net NPAs reduced to 1.70% in Q4FY23 compared to 2.42% in the same quarter of last fiscal year.
In response to the strong Q4 performance, the stock began Monday's session strongly at ₹146.60 apiece, and it maintained the same momentum to hit an intra-day high of ₹153.50, up ₹9.75, or 6.78%, against the previous close of ₹143.75. This intraday gain propelled the stock to hit an 11-week high.
The stock has been performing exceptionally well over the last one-year buoyed by strong fundamentals. During this period, the stock has climbed from ₹65.30 apiece to the current level of ₹151.80, generating a staggering return of 132.46%, and from its 52-week low of ₹59.2, the stock is up by 151.55%.
According to Trendlyne, the stock has an average target price of ₹191 apiece, suggesting a potential upside of 26% from its current market price.
Further, the bank saw its FII holdings rise to 20.3% in the fourth quarter of FY23 from 19.8% in Q3 FY23, an increase of about 0.5%. Regular shareholders hold the majority stake in the bank at 74%. DIIs own 5.7% stake in the bank.
Disclaimer: The views and recommendations made above are those of individual analysts or broking companies, and not of MintGenie.
