Shares of Karnataka Bank opened strongly in Wednesday's trade after the bank reported its highest-ever net profit in Q2FY23. The stock opened with a huge gap up of ₹13.10, or 13.95%, at ₹107, and it maintained the same momentum to hit an intra-day high of ₹112.65, up Rs.18.75, or 20%, against the previous close of Rs.93.90, and it freezes in the upper circuit.
The stock started its upward trend after hitting a 52-week low of Rs. 55.45 in March. Since then, it has doubled investors' wealth by rising 103%, and at the current moment, it is trading at a three-year high. On the technical charts, the stock is trading 63.73% above its 200-day moving average.
At the current market price of Rs. 112.65, the bank's PE ratio stands at 4.37x, which is significantly lower than the sector's PE ratio of 29.40x.
On Tuesday, the bank reported its highest ever-net profit at Rs. 411.63 crore in Q2FY23, up by 227% from Rs.125.61 crore in the corresponding quarter of the last fiscal.
The bank's net interest income grew by 26% to ₹802.73 crore during the quarter, from ₹637.10 crore in the year-ago period. The net interest margin (NIM) of the bank rose to 3.56% during Q2, compared to 3.15% in the September 2021 quarter.
The bank's asset quality improved as its gross non-performing assets declined to 3.36% in the September quarter from 4.52% in Q2FY22 and net NPAs reduced to 1.72% in Q2FY23 compared to 2.85% in the same quarter of last fiscal.
In addition to that, the capital adequacy ratio of the bank stood at 15.28% in Q2 against 14.48 per cent in the corresponding period of the previous fiscal.
The share of CASA (current account and savings account) deposits in Karnataka Bank stood at 32.82% of all deposits during the second quarter of 2022-23. The share of CASA was 30.88 per cent during the second quarter of 2021-22, said Mahabaleshwara MS, MD and Chief Executive Officer of the Bank.
The core deposits of the bank stood at Rs.81,628.97 crore during Q2 2022-23. Gross advances grew at a satisfactory rate of 10.09 per cent during the quarter, he said.
Meanwhile, the bank saw its FII holdings rise to 18.2% in the second quarter of FY23 from 9.1% in Q2FY22, an increase of about 9.1%. Regular shareholders hold the majority stake in the company, with 76.5%. DIIs hold 12.1% of the stake in the bank.
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