KARNATAKA BANK

COMPANY PROFILE

Karnataka Bank Limited, a leading 'A' Class Scheduled Com- mercial Bank in India, was incorporated on February 18th, 1924 at Mangalore, a coastal town of Dakshina Kannada dis- trict in Karnataka State. Over the years the Bank grew with the merger of Sringeri Sharada Bank Ltd., Chitradurga Bank Ltd. and Bank of Karnataka. With over 88 years experience at the forefront of providing professional banking services and quality customer service, the bank now have a national pres- ence with a network of 503 branches spread across 20 states and 2 Union Territories.

Karnataka Bank has set a lending target of Rs.3770 crore to Agricul- ture sector by March 2013. NABCONS, a wholly owned Com- pany of NABARD is a leader in consultancy services in the field of agriculture and rural development, serving both na- tional and international clients viz: Govt. of India, State Gov- ernments, Banks and Financial Institutions, Companies, indi- viduals, International Agencies etc.

STOCK INFORMATION

STOCK PRICE

143.00

TARGET PRICE

150-160

SECTOR

PVT. BANK

SYMBOL (AT NSE)

KTKBANK

ISIN

INE614B01018

FACE VALUE (IN RS.)

10.00

BSE CODE

532652

STOCK FUNDAMENTALS

MARKET CAP

2695.91

BOOK VALUE

161.96

EPS - (TTM) (IN RS. CR.)

21.12

P/E

6.77

INDUSTRY P/E

21.47

INVESTMENT RATIONALE

Karnataka Bank net profit jumps to Rs. 800.70 million as against Rs. 720.50 million in the corresponding quarter end- ing of previous year, an increase of 11.13%. Revenue for the quarter rose 20.90% to Rs. 9643.40 million from Rs. 7976.50 million, when compared with the prior year period. Re- ported earnings per share of the company stood at Rs. 4.25 a share during the quarter, registering 11.10% an increase over previous year period. Net Interest Income is Rs. 3140.40 millions as against Rs. 2720.10 millions in the corresponding period of the previous year.

SHAREHOLDING PATTERN

OUTLOOK AND VALUATION

At the current market price of Rs.143, the stock P/E ratio is at 8.22 x FY13E and 6.61 x FY14E respectively. Earning per share (EPS) of the company for the earnings for FY13E and FY14E is seen at Rs. 19.70 and Rs.24.49 respectively. Net In- come and PAT of the company are expected to grow at a CAGR of 23% and 31% over 2011 to 2014E respectively. On the basis of Debt-Equity Ratio, the stock trades at 12.69 x for FY13E and 12.63 x for FY14E. Price to Book Value of the stock is expected to be at 1.03 x and 0.89 x for FY13E and FY14E respectively. We expect that the company will keep its growth story in the coming quarters also. We recommend ‘BUY’ in this particular scrip with a target price of Rs 150-160 for medium term investment.

RESULTS (Quarterly )(Rs CR.)

 

SEP' 14

JUN' 14

MAR' 14

DEC' 13

SEP' 13

Sales

1,175.67

1,124.54

1,058.60

1,067.69

1,064.69

Operating profit

854.61

848.73

745.45

826.68

737.28

Interest

878.40

846.33

808.67

796.19

780.15

Gross profit

162.62

188.04

89.15

168.75

171.64

EPS (Rs)

4.69

6.45

4.31

5.66

1.54

TECHNICAL VIEW

Karnataka Bank LTD is looking strong on charts. We advise to buy around 140-145 with stop loss of 134 for the targets of 150-160 levels. RSI is also showing upside momentum in it on weekly charts.

SYMBOL

VALUE

ACTION

RSI(14)

69.746

BUY

STOCH(9,6)

58.987

NEUTRAL

STOCHRSI(14)

83.617

OVERBOUGHT

MACD(12,26)

1.270

BUY

ADX(14)

43.227

BUY

WILLIAMS %R

-10.495

OVERBOUGHT

CCI(14)

152.5652

BUY

ATR(14)

5.6214

HIGH VOLATILITY

HIGH/LOWS(14)

6.2250

BUY

ULTIMATE OSCILLATOR

52.864

BUY

ROC

19.366

BUY

BULL/BEAR POWER()13

16.7720

BUY

BUY: 09 SELL:0 NEUTRAL: 2

SUMMARY : STRONG BUY

Our Other Recommendation for Next Week

SCRIP

ACTION

CMP

ENTRY

SL

TGT

TIME FRAME

CAIRN

SELL

270.85

260-265

278

250-240

ONE WEEK

BHARATFORGE

BUY

916.15

940-920

900

980

ONE WEEK

ADANIPOWER

SELL

45.45

44-46

48

44-42

ONE WEEK

HINDALCO

BUY

160.45

156-160

150

164-168

ONE WEEK

FEDERAL BANK

BUY

147.7

145-148

140

152-155

ONE WEEK

Performance of Previous Week

SCRIP

LOT

ACTION

ENTRY

SL

TGT

P&L

REMARK

CLOSE/LOW/HIGH

SIEMENS

250

BUY

900-920

875

950-975

7500.00

FIRST TGT HIT

909.90 / 955.95

ADANI PORT

1000

BUY

295-298

292

304-309

13950.00

BOTH TGT HIT

302.75 / 308.95

LUPIN

250

BUY

1425-1450

1400

1480-1490

11250.00

FIRST TGT HIT

1469.50 / 1481.80

VOLTAS

1000

BUY

270-272

266

276-280

10000.00

BOTH TGT HIT

276.40 / 281.00

HINDALCO

2000

BUY

155-158

150

162-165

12000.00

NEAR TGT

160.45 / 161.25

ADANI ENT

500

BUY

485- 490

475

500-510

-5000.00

SL TRG

478.40 / 505.95

NET PROFIT

 

 

 

 

 

49700.00

 

 

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DISCLAIMER

This report is only for the information of our customers. Recommendations, opinions, or suggestions are given with the understanding that readers acting on this information assume all risks involved. The information provided herein is not to be construed as an offer to buy or sell securities of any kind. ATS and/or its group companies do not as assume any responsibility or liability resulting from the use of such information.

 

 

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