Karur Vysya Bank Ltd. (KVB); maintain buy with PT of Rs 672

Karur Vysya Bank Ltd. (KVB); maintain buy with PT of Rs 672 | We had an interaction with management of Karur Vysya Bank for getting an update on business and outlook for next year. KVB remains our preferred pick in mid size private sector banking space apart from Federal Bank. We have already built in lower loan growth for FY15 which is now coraborated by management. Hence there is no change to our growth assumptions for FY15E. However we expect pick up in loan growth from FY16 onwards. Further key positive takeaway from management interaction is on asset quality front which has stabilized with no significant incremental impairments. We expect Net profit growth of 17% over FY15-17E with ROEs / ROAs improving to 14% / 0.9% by FY17E. At CMP of Rs 581, KVB is trading at P/ABV of 1.7x and 1.6x for FY16E and FY17E respectively. We continue to maintain buy rating on KVB with target price of Rs 672, valuing it at 1.5x FY17E ABV. (IndiaNivesh)