Mangaluru-headquartered private sector lender Karnataka Bank’s shares appreciated to the tune of 9.94% to reach an intraday high of ₹ 152.00 apiece on the National Stock Exchange (NSE) after it registered a growth of 105% in its net profit. Its shares were trading at ₹ 147.00 apiece at 12:30 PM on Friday.
Karnataka Bank reported a Total Income from operations of ₹ 2055.31 crores in the quarter ended December against ₹ 1761.53 crores in the same quarter last year, indicating an increase of 16.68%. It posted a net profit of ₹ 300.63 crores in the October to December quarter of 2022, indicating an increase of 105.32% against ₹ 146.42 crores reported in the corresponding quarter of the previous year.
The bank reported a decline in its net NPA ratio at 1.66% in the latest quarter, against ₹ 2.45% in the same quarter last year, indicating an improvement in its asset quality. In addition, its net interest margin increased from 3.16 to 3.81.
The shares of Karnataka bank gave multibagger returns of 116.50% as its share price increased from ₹ 67.90 to the current level. If an investor would have invested ₹ 1 lakh in the company’s shares a year ago, the value of their holdings would have been ₹ 2.16 lakhs today!
Karnataka Bank provides a wide range of banking & financial services including retail, corporate banking and para-banking activities, in addition to treasury and foreign exchange business. It has a market capitalization of ₹ 4,313 crores and is a small-cap banking company. The bank has a low return on equity of 7.40%, but a good dividend yield of 2.89%. Its shares were trading at a price-to-earnings ratio of 5.38 against the industry average of 9.35, indicating that its shares might be undervalued as compared to its peers.
Written By Simran Bafna
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