Shares of Karnataka Bank jumped more than 7 per cent on Thursday, extending their gains for the second straight session. The stock touched its 52-week high of Rs 123.05 during intraday deals. It finally settled 7.06 per cent higher at Rs 120.50 today on BSE. A total of 25.40 lakh shares changed hands amounting to a turnover of Rs 30.35 crore.
The stock has zoomed over 28 per cent in just two trading sessions after the lender posted a record profit for the September quarter.
“Karnataka Bank shares surged on the back of strong quarterly results, posted after a long time. Given the current pricing, a further upside of 10 per cent could be possible,” said AK Prabhakar, Head of Capital, IDBI Capital.
Also Read | SBI Mutual Fund’s IPO plan shelved for now, says SBI chairman
The bank clocked a 228 per cent growth in the second quarter (Q2) profit, at Rs Rs 411.47 crore, compared to a profit of Rs 125.45 crore posted in the same period a year ago. The sharp surge in the quarterly profit was mainly on account of improved asset quality, healthy growth in advances, cost containment and efficiency enhancement efforts, the private lender said.
“The counter has come out of long consolidation as well as an inverse head and shoulder pattern breakout in the longer timeframe with strong volume. The current structure of the counter looks fertile as it has traded above all important moving averages. On the higher side, Rs 125–130 is the susceptible level; above this, Rs 150 is the target for the near term, while on the lower side, Rs 90 is the critical support, said Pravesh Gour, Senior Technical Analyst, Swastika Investmart Ltd.
Commenting on the Q2 performance, Managing Director & CEO of Karnataka Bank, Mahabaleshwara MS said: “Our all-time high Q2FY23 result represents the tipping point of the bank’s reinvigorated trajectory. Our disciplined execution and aggressive digitalisation, combined with our commitment to superior customer experience, is fortifying Karnataka Bank’s reputation for delivering sustained profitable growth.”
Also Read | Canara Bank vs Federal Bank: How much upside can these Jhunjhunwala portfolio stocks deliver?
The bank said its net interest income (NII) jumped 26 per cent (YoY) to Rs 802.73 crore from Rs 637.10 crore in the year-ago quarter. Further, the net Interest Margin (NIM) improved to 3.56 per cent from 3.15 per cent (YoY).
Asset quality also improved, with gross non-performing assets (NPAs) falling to 3.36 per cent in Q2 from 4.03 per cent in the June quarter.