Karur Vysya Bank (KARURVYSYA)

FairStock Score: 40/100 — MIXED

Score breakdown: P/E: 2/3 · ROCE: 0/2 · Growth: 2/2 · Dividend: 0/1

Key Financials

Strengths

• Profit growth of 21.99% with sales growth of 14.34% shows strong operating momentum.
• ROE of 19.27% is well above the bank's book value base and supports the premium P/B of 2.40.
• Piotroski F-Score of 8/9 indicates very good financial health and profitability discipline.
• Positive free cash flow of ₹2,336 Cr and a latest-quarter net profit of ₹690 Cr reflect earnings power.
• PEG of 1.06 suggests the current P/E is not grossly excessive relative to profit growth.

Concerns

• Margin of safety is negative at -26.72%; price of ₹296.75 is above the Graham Number of ₹257.42.
• Promoter holding of only 2.07% means very little owner capital is at risk.
• Altman Z-Score of 0.54 would signal distress in a non-bank and demands extra scrutiny for the leverage in the balance sheet.
• Dividend yield of 0.66% is thin for a patient income-oriented investor.

AI Analysis

I try not to be swayed by screens, but Karur Vysya Bank deserves a hard look. The business is compounding: sales up 14.34%, profit up 21.99%, and ROE at 19.27%. That is an attractive return on book value, and at ₹296.75 the stock trades at 13.72 times earnings and 2.40 times book value. For a bank with this kind of growth, the price is not cheap, but it is not absurd either; the PEG of 1.06 suggests the market is paying roughly fair value for the growth. Financial health looks solid. A Piotroski score of 8 out of 9 tells me profitability and operating efficiency are strong. Free cash flow of ₹2,336 Cr is positive, although I am old-fashioned enough to remember that banks should be judged by capital and asset quality rather than cash flow. The debt-to-equity of 8.66 is simply the leverage inherent in banking, not automatically a red flag. The Altman Z-score of 0.54 would terrify me in an industrial company, but for a bank it is not a meaningful measure, so I set it aside. What holds me back is valuation. The Graham number is ₹257.42, and the stated margin of safety is -26.72%. I want to buy below intrinsic value, not above it. The DCF says ₹1,294.06, but DCFs for banks are unreliable, and I would rather trust the margin of safety. Also, promoter holding is only 2.07%; I like management to have skin in the game. Dividend yield of 0.66% is small comfort. If Karur Vysya can hold ROE near 19% and keep compounding profits at double-digit rates, it is a decent grower. But I need a better price, or a longer record of consistent capital allocation, before calling it a Buffett-quality investment. It is a fast grower with a solid franchise, but I remain patient.

Data from BSE/NSE filings. AI analysis is for educational purposes only — not investment advice. Scoring methodology · Disclaimer