Mehabe score: 6 G Factor: 2 Piotski Score: 8 The stock has a rating OBSERVE & HOLD. The mehabe team score is reflective of its fundamental and technical merits. A rating above 8 is considered good buy. The stock has a G-Factor of 2 and Piotski score of 8.
Description
Karur Vysya Bank is engaged in providing a wide range of banking and financial services including commercial banking and treasury operations.[1]Site:KARURVYSYAMain Symbol:KARURVYSYA
Stock trades at 51.4, above its 50dma 46.64. It also trades above its 200dma 48.15. The stock remains bullish on techicals
The 52 week high is at 64.55 and the 52week low is at 29.30
Price Chart
P/E Chart
Sales and Margin
Strengths
– Stock is trading at 0.59 times its book value
Weakness
– has low interest coverage ratio.
-The company has delivered a poor sales growth of 0.10% over past five years.
-Promoter holding is low: 2.12%
– has a low return on equity of 4.14% for last 3 years.
-Contingent liabilities of Rs.12286.81 Cr.
– might be capitalizing the interest cost
-Earnings include an other income of Rs.959.51 Cr.
-Dividend payout has been low at 11.29% of profits over last 3 years
Competition
– The industry trades at a mean P/E of 20.6x. Kotak Mah. Bank trades at the industry’s max P/E of 40.85x. KARURVYSYA trades at a P/E of 11.3x
– Industry’s mean G-Factor is 3.4 while the mean Piotski score is 8.0. KARURVYSYA has a G-Factor of 2 and Piotski scoreof 8.
– Average 1 month return for industry is 3.3%. The max 1- month return was given by IDBI Bank: a return of 15.15 %
Quarterly Results
Sales for period ended Sep 2021 is Rs 1398.0 cr compared to Rs 1395.0 cr for period ended Sep 2020, a rise of 0.2%
Operating Profits reported at Rs 634.0 cr for period ended Sep 2021 vis-vis 620.0 for period ended Sep 2020 .
Operating Margins expanded 90.6 bps for period ended Sep 2021 vis-vis Sep 2020 .
The EPS for Sep 2021 was Rs 2.07 compared to Rs 1.36 for previous quarter ended Jun 2021 and Rs 1.44 for Sep 2020
Profit & Loss Statement
Profit&Loss Comments
Company reported sales of Rs 5474.0 cr for period ended TTM vis-vis sales of Rs 5470.0 cr for the period ended Mar 2021, a growth of 0.1%. The 3 year sales cagr stood at -2.0%.
Operating margins expanded to -223.0% for period ended TTM vis-vis -398.0% for period ended Mar 2021, expansion of 17500.0 bps.
Net Profit reported at Rs 413.0 cr for period ended TTM vis-vis sales of Rs 359.0 cr for the period ended Mar 2021, rising 13.1%.
Company recorded a healthy Net Profit CAGR of 25.1% over the last 3 years
Balance Sheet Statement
Cash Flow Statement
Cash Flow comments
CashFlow from operating activities was positive.
CashFlow from operating activities: Rs 3366.0 cr for period ended Mar 2021 vis-vis Rs 2504.0 cr for period ended Mar 2020
Sales Growth
Profit Growth Statement
Profit Growth Statement
Stock Price CAGR
Return of Equity
General Comments
– The company has had stable/constant Return on Equity (RoE) metric. The RoE on Last Year basis was 5.0% compared to 4.0% over the last 3 Years. – The stock has given a return of 51% on a 1 Year basis vis-vis a return of -14% over the last 3 Years. – The compounded sales growth on a TTM bassis is -7% vis-vis a compounded sales growth of -1% over the last 3 Years. – The compounded profit growth on a TTM basis is 36% vis-vis a compounded profit growth of 1% over the last 3 Years.
Ratios
Shareholding Pattern
– FII shareholding has remained largely constant. The Sep 2019 fii holding stood at 19.62% vis-vis 19.38% for Jun 2019 – Public shareholding has remained largely constant. The Sep 2019 public holding stood at 54.04% vis-vis 55.06% for Jun 2019
Conclusion
– Stock is trading at 0.59 times its book value – has low interest coverage ratio.
-The company has delivered a poor sales growth of 0.10% over past five years.
-Promoter holding is low: 2.12%
– has a low return on equity of 4.14% for last 3 years.
-Contingent liabilities of Rs.12286.81 Cr.
– might be capitalizing the interest cost
-Earnings include an other income of Rs.959.51 Cr.
-Dividend payout has been low at 11.29% of profits over last 3 years
Fundamentally, the stock remains weak on business fundamentals. Weak near term results have dampened and questioned business drivers. We suggest to wait for a upturn in business performance.
Technically, the stock trades above its 50 DMA 46.64 and is trading at 51.4 It has shown near term bullish momentum contrary to business fundamentals. We suggest to observe price action. However as investors, who like to avoid timing the markets, we suggest to avoid the stock
