DCB Bank, Federal Bank, Karur Vysya Bank hit record high

Thus far in calendar year 2017, these banks rallied upto 95% against 16% rise in Sensex

Shares of three private sector banks such as DCB Bank (Rs 213), Federal Bank (Rs 122) and Karur Vysya Bank (Rs 150) hit their respective record highs, while South Indian Bank (Rs 30) touched 52-week high on BSE on Friday in intra-day trade.

Thus far in the calendar year 2017, all these four stocks outperformed the market by gaining in the range of 66% to 95%, as compared to 16.5% rise in the S&P BSE Sensex.

“Federal Bank has beefed up its top management over the past one year with new recruits to the post of executive director, chief operating officer, chief credit risk officer and investment officer. The change brought in by these new officials has already been witnessed in healthy as well as quality corporate loan growth,” analysts at Nirmal Bang Securities said in a report.

The management plans to focus on better-rated companies and the secured retail segment. The share of corporate credit to entities with BBB rating and above increased to 90% from 57% in FY15. Better operating efficiency at branches is also expected to result in significant improvement in overall operating efficiency, added report.

Karur Vysya Bank has rallied 6% to Rs 150 on BSE. The bank’s board in last month has approved rights issue of equity shares in the ratio of 1:6 i.e., 1 equity share for every 6 equity shares held on a record date which is to be fixed at a later date, at a price of Rs 76 per equity share.

“Karur Vysya Bank had a fairly strong loan CAGR of 14.9% over FY11-17.However, FY17 was year of consolidation and loan book grew by only 4.7%. We expect loan growth to pick up to 11% over FY17-19. Deposit growth is expected at 9% during the period,” Angel Broking said in Top picks report.

Bank	30/12/2016	LTP	% chg
DCB Bank	107.90	210.00	94.62
Karur Vysya Bank	81.80	148.65	81.72
Federal Bank	66.90	120.65	80.34
South Ind.Bank	17.69	29.30	65.63
Sensex	26626.46	31041.45	16.58