Karur Vysya Bank rallies 7% on huge volumes; hits new high in weak market

Considering the moderation in slippage ratio and adequate PCR, CareEdge Ratings anticipates the Karur Vysya Bank's asset quality to remain stable in the medium term.

Karur Vysya Bank share price today

 

Share of Karur Vysya Bank moved higher by 7 per cent to ₹267.30 on the BSE in Friday’s intra-day trade amid heavy volumes in an otherwise weak market. 

 

The stock price of the private sector lender surpassed its previous high of ₹258.50 touched on November 3, 2025. In the past three months, it has outperformed the market by surging 28 per cent, as compared to 6 per cent rise in the BSE Sensex.

 

At 12:19 PM; Karur Vysya Bank stock was quoting 6.5 per cent higher at ₹266.40, as compared to 0.36 per cent decline in the BSE Sensex. The average trading volumes at the counter jumped over five-fold, with a combined 5.9 million equity shares changing hands on the NSE and BSE.  READ LATEST STOCK MARKET UPDATES TODAY LIVE

 

Why has Karur Vysya Bank Stock outperformed the Sensex?

 

Karur Vysya Bank has achieved significant progress in diversifying its loan portfolio with focus on commercial banking (exposure ≤₹25 crore), retail and agriculture segments.

 

As on September 30, 2025, the gross advances (including credit substitutes) stood at ₹93,804 crore. The commercial banking segment comprised 35.40 per cent, followed by retail and agriculture at 25 per cent and 24 per cent, respectively, while the corporate banking segment constituted 15 per cent of the advances portfolio. Within retail, major segments included housing loans (constituting 34.50 per cent of retail), mortgage loans (30.86 per cent) and jewel loans (19.98 per cent). 

 

Other retail segments included vehicle loans, consumer credit, individual loans and education loans. CareEdge Ratings anticipates the growth momentum to continue with predominant focus on commercial and retail segments.

 

In H1FY26 (April to September), the bank’s net interest margin (NIM) improved to 3.86 per cent due to an increased yield on advances driven by higher disbursements in retail, agriculture and micro, small, and medium enterprises (RAM) segment.  Asset quality continues to remain stable in H1FY26 with GNPA and NNPA standing at 0.76 per cent and 0.19 per cent, respectively, as on September 30, 2025.

 

Operating expenses reduced further to 2.43 per cent. PPOP improved to ₹1,823 crore in H1FY26 compared to ₹1,562 crore in H1FY25. The bank reported a profit after tax (PAT) of ₹1,095 crore on total income of ₹6,336 crore in H1FY26 compared to PAT of ₹932 crore on total income of ₹5,529 crore in H1FY25.   ALSO READ | Dilip Buildcon shares gain 5% on winning two infra projects; Details here 

CareEdge Ratings expects some pressure on the bank’s NIM in line with the industry trend; due to faster transmission of the recent repo rate cuts in yield on advances than in cost of funds, which would impact profitability in FY26. Considering the moderation in slippage ratio and adequate PCR, the rating agency anticipates the bank’s asset quality to remain stable in the medium term.

 

Within retail, high-yielding gold loans/ loan against property (LAP) remain key growth drivers, together contributing 52 per cent of retail loans. Karur Vysya Bank attempted to diversify its retail portfolio by venturing into MFI and BNPL (in a tie-up with Amazon), but has limited exposure, as credit risk has built up in both segments.  Going ahead, Karur Vysya Bank expects to sustain credit growth at 2-3 per cent above the system’s in FY26E, while maintaining firm focus on balancing asset quality and profitability. Analysts at Emkay Global Financial Services estimate FY26E credit growth at 14 per cent YoY. The brokerage firm retained its BUY rating on the stock with target price of ₹270 based on 1.5x Sep-27E ABV.  =============================  Disclaimer: View and outlook shared on the stock belong to the respective brokerages and are not endorsed by Business Standard. Readers discretion is advised.