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  4. /Karnataka Bank Ltd
MomentumDeep Value

Karnataka Bank Ltd: Why Is It Outperforming Nifty 500?

Active
RS +30.8%Weak10w StreakRe-Entry

In Week of May 10, 2026, Karnataka Bank Ltd (Banks - Private) is outperforming Nifty 500 with +30.8% relative strength. Fundamentals: Weak. On a 10-week streak.

Karnataka Bank Ltd Key Facts

PE Ratio
8.5x
Market Cap
₹9,808 Cr
PAT Growth YoY
+3%
Revenue Growth YoY
-1%
RS vs Nifty 500
+30.8%
PB: Mid ContractionFalling Knife

What's Happening

🔻Earnings declining and PB falling — fundamentals deteriorating
🌐FII stake increased 4.3% this quarter
🏛️DII reducing — stake down 5.9%
🏦GNPA at 3.32% — stable asset quality
💰Trading 5% above estimated fair value

Earnings Acceleration Triggers

1. Asset Quality Improvement
Q3 FY26HIGH
2. Value Added Product Mix Shift
Q3 FY26MEDIUM
3. NIM expansion of 20 bps QoQ
HIGH

Key Risks

1. Stress in MSME and housing segments within SMA-2 accounts
MEDIUM
2. Pressure on yields due to repo rate cuts impacting EBLR-linked loans
LOW

Sector-Specific Signals

Net Interest Margin2.92%-10 bps
Gross NPA Ratio3.32%+21 bps
Net NPA Ratio1.31%-8 bps
CASA Ratio31.53%

Key Numbers

PAT Growth YoY
+3%
Inflection Up
Revenue YoY
-1%
Inflection Down
GNPA
3.32%
Stable
Price to Book
0.8
Current Price
₹259
Dividend Yield
1.93%
Fundamental Score
24/100
Weak
3Y PAT CAGR
+36%
Market Cap
9.8K Cr
Valuation
Fairly Valued

12-Week Performance

Weekly presence in the outperformers list. Green = beating Nifty 500 by 10%+ that week.

12 weeks agoThis week

Why Are Karnataka Bank Ltd's Earnings Accelerating?

Based on Q3 FY26 earnings • Updated Apr 18, 2026

Asset Quality Improvement

Expected: Q3 FY26HIGH confidence

What: Net NPA: 1.31%

“Net NPA percentage as on 31st December '25 stood at 1.31% amounting to INR 994.70 crores as against 1.35%... in September '25.”

Value Added Product Mix Shift

Expected: Q3 FY26MEDIUM confidence

What: RAM Segment Growth: ₹962 Cr net accretion

“Overall strategy is to continue to focus on growing retail, agri and MSME, with the growth led by the MSME, housing and gold loan portfolios.”

NIM expansion of 20 bps QoQ

HIGH confidence

What: NIM expansion of 20 bps QoQ

“NIM has shown improvement as you are observing in Q2, in Q3 there is improvement. Further improvement will happen. 1% plus will definitely happen.”

What Are the Key Risks for Karnataka Bank Ltd?

Earnings deceleration risks from management commentary

Stress in MSME and housing segments within SMA-2 accounts

MEDIUM

Trigger: MSME stress was linked to CMA renewals and working capital facility delays.

Management view: Continuous follow-up efforts and renewal of working capital facilities are in place.

Monitor: commodity

Pressure on yields due to repo rate cuts impacting EBLR-linked loans

LOW

Trigger: 77-80% of the loan book is EBLR-based, leading to immediate repricing of assets.

Management view: Recalibrating lending mix and focusing on CASA to lower cost of funds.

Monitor: regulatory

What Is Karnataka Bank Ltd's Management Saying?

Key quotes from recent conference calls

“Minimum CD ratio, our aim is to take it to 80%, but it maybe very aggressive target. But unless and until we increase our CD ratio to that level. [Previous CD Ratio guidance]”
“Therefore, priority is to increase the CD ratio, Mr. Choksey, that I think if you ask me, CD ratio is 80%. NIM, as I was always telling 3% plus. [Previous NIM guidance]”
“Regarding focus area, as I told you earlier, and again, I am repeating, the retail, mid-corporates, retail, MSME, housing and gold loan. [Initiative: RAM Segment Focus]”
“Since I am focusing on CASA, my overall yield, or what you call, spread, everything, cost controlling, because of improvement in CASA. [Initiative: CASA Accretion]”

What Did Karnataka Bank Ltd Report This Quarter?

Headline numbers from the latest earnings call

Revenue

₹792.06 Cr

QoQ +8.8%

Why: Growth was supported by an increase in CASA and a reduction in the share of high-cost bulk deposits.

NII growth was driven by lower cost of deposits despite yield pressure.

PAT

₹290.79 Cr

YoY +2.5%QoQ -9%

Why: The sequential decline was due to accelerated provisioning undertaken to increase the Provision Coverage Ratio.

Management prioritized balance sheet strengthening over immediate PAT growth.

Other Highlights

• Gross advances grew 5% QoQ to ₹77,283.85 crores.

• CASA deposits increased to 31.53% of aggregate deposits.

• PCR improved to 61.23% excluding technical write-offs.

What Sector Metrics Matter for Karnataka Bank Ltd?

Sub-sector-specific signals from the latest concall — each with management's stated reason for the change

Net Interest Margin

2.92%

YoY -10 bpsQoQ +20 bps

Why: Improvement driven by lower cost of deposits and focus on RAM segment.

Gross NPA Ratio

3.32%

YoY +21 bpsQoQ -1 bps

Why: Marginal improvement QoQ due to intensified collection efforts.

Net NPA Ratio

1.31%

YoY -8 bpsQoQ -4 bps

Why: Reflects intensified efforts to control slippages and improve recovery efficiency.

CASA Ratio

31.53%

QoQ +52 bps

Why: Focused strategies to accelerate CASA growth and reduce high-cost bulk deposits.

Provision Coverage Ratio

80.90%

YoY +26 bpsQoQ -15 bps

Why: Accelerated provisioning undertaken to strengthen the balance sheet.

CD Ratio

74.23%

YoY -361 bpsQoQ +260 bps

Why: Continuous effort to increase the CD ratio through RAM segment focus.

Cost of Deposits

5.43%

QoQ -7 bps

Why: Curtailed acceptance of high-cost bulk deposits and renewal at predefined card rates.

Yield on Advances

8.71%

YoY -66 bpsQoQ -27 bps

Why: Impacted by repo rate cuts and reduction in external benchmark rates.

What Is Karnataka Bank Ltd's Management Guidance?

Forward-looking targets from management for FY26

Revenue Growth Target

15%

OPM Guidance

3%

Revenue Outlook

15% business growth

Margin Outlook

REAFFIRMED

Volume

REAFFIRMED

Management Tone: BULLISH

Guidance Changes

LOWERED

CD Ratio: 80% → 76% to 80%

How Fast Is Karnataka Bank Ltd Growing?

Revenue, profit and margin growth rates

MetricYoY3Y CAGRTrend
Revenue-1%+13%Inflection Down
PAT (Net Profit)+3%+36%Inflection Up

The above analysis is parsed from publicly available earnings call transcripts. This is educational research only — not investment advice. Last updated Apr 18, 2026.

Other Top Banks - Private Stocks Beating Nifty 500

IndusInd Bank Ltd
Average
+6.6%
Federal Bank Ltd
Average
+5.0%
Yes Bank Ltd
Average
+9.1%
Bandhan Bank Ltd
Average • 5w streak
+30.9%
RBL Bank Ltd
Weak
+15.1%
← Back to Banks - PrivateDashboard

Frequently Asked Questions: Karnataka Bank Ltd

Based on publicly available financial data. This is educational research, not investment advice.

What were Karnataka Bank Ltd's latest quarterly results?

Karnataka Bank Ltd's latest quarterly results (Dec 2025) show

  • PAT Growth YoY: +2.5% (turning around (inflection up))
  • Revenue Growth YoY: -1.0%
  • Net Interest Margin: 2.00%
  • Gross NPA: 3.32%

Is Karnataka Bank Ltd's profit growing or declining?

Karnataka Bank Ltd's profit is growing with an turning around (inflection up) trend.

  • PAT Growth YoY: +2.5% (latest quarter)
  • PAT Growth QoQ: -8.8% (sequential)
  • 3-Year PAT CAGR: +35.8%
  • Trend: Turning around (inflection up) — consistent growth pattern

What is Karnataka Bank Ltd's revenue growth trend?

Karnataka Bank Ltd's revenue growth trend is inflecting downward.

  • Revenue Growth YoY: -1.0%
  • Revenue Growth QoQ: +1.9% (sequential)
  • 3-Year Revenue CAGR: +13.2%

What is Karnataka Bank Ltd's asset quality trend?

Karnataka Bank Ltd's asset quality trend is stable.

  • Gross NPA: 3.32%
  • Net NPA: 1.31%
  • GNPA Change YoY: +0.2% bps

What is Karnataka Bank Ltd's 3-year profit and revenue CAGR?

Karnataka Bank Ltd's long-term compounding rates

  • 3-Year Profit CAGR: +35.8%
  • 3-Year Revenue CAGR: +13.2%

Is Karnataka Bank Ltd's growth accelerating or decelerating?

Karnataka Bank Ltd's earnings growth is turning around (inflection up) with weakening on a sequential basis.

  • YoY Acceleration: +7.6% bps
  • Sequential Acceleration: -18.0% bps
  • Margin Warning: Operating margins are under pressure

What is Karnataka Bank Ltd's trailing twelve month (TTM) performance?

Karnataka Bank Ltd's trailing twelve month (TTM) performance

  • TTM PAT: ₹1,000 Cr
  • TTM PAT Growth: -10.7% YoY
  • TTM Revenue: ₹9,000 Cr
  • TTM Revenue Growth: -0.4% YoY

Is Karnataka Bank Ltd overvalued or undervalued?

Karnataka Bank Ltd appears fairly valued based on our fair value analysis.

  • Valuation Signal: Fairly Valued
  • Current PE: 8.5x
  • Price-to-Book: 0.8x

What is Karnataka Bank Ltd's current PE ratio?

Karnataka Bank Ltd's current PE ratio is 8.5x.

  • Current PE: 8.5x
  • Market Cap: 9.8K Cr
  • Dividend Yield: 1.93%

How does Karnataka Bank Ltd's valuation compare to its history?

Karnataka Bank Ltd's current PE is 8.5x.

  • Current PE: 8.5x
  • Valuation Assessment: Fairly Valued

What is Karnataka Bank Ltd's price-to-book ratio?

Karnataka Bank Ltd's price-to-book ratio is 0.8x.

  • Price-to-Book (P/B): 0.8x
  • Book Value per Share: ₹333
  • Current Price: ₹259

Is Karnataka Bank Ltd a fundamentally strong company?

Karnataka Bank Ltd is rated Weak with a fundamental score of 24.42/100. This score is calculated from objective financial metrics

  • PAT Growth YoY: +2.5% (20% weight)
  • PAT Growth QoQ: -8.8% (15% weight)
  • Earnings trend: inflection_up (5% weight)

Is Karnataka Bank Ltd debt free?

Karnataka Bank Ltd has a debt-to-equity ratio of N/A.

  • Total Debt: ₹1,000 Cr

What is Karnataka Bank Ltd's return on equity (ROE) and ROCE?

Karnataka Bank Ltd's return ratios over recent years

  • FY2023: ROE 15.0%
  • FY2024: ROE 14.0%
  • FY2025: ROE 11.0%

Is Karnataka Bank Ltd's cash flow positive?

Karnataka Bank Ltd's operating cash flow is positive (FY2025).

  • Cash from Operations (CFO): ₹210 Cr
  • Free Cash Flow (FCF): ₹-481 Cr
  • CFO/PAT Ratio: 16% (weak cash conversion)

What is Karnataka Bank Ltd's dividend yield?

Karnataka Bank Ltd's current dividend yield is 1.93%.

  • Dividend Yield: 1.93%
  • Current Price: ₹259

Who holds Karnataka Bank Ltd shares — promoters, FII, DII?

Karnataka Bank Ltd's shareholding pattern (Mar 2026)

  • FII (Foreign): 11.8%
  • DII (Domestic): 16.2%
  • Public: 72.0%

Is promoter holding increasing or decreasing in Karnataka Bank Ltd?

Karnataka Bank Ltd's promoter holding is 0.0%.

  • Current Promoter Holding: 0.0% (Mar 2026)

How long has Karnataka Bank Ltd been outperforming Nifty 500?

Karnataka Bank Ltd has been outperforming Nifty 500 for 10 consecutive weeks, indicating consistent outperformance.

Is Karnataka Bank Ltd a new momentum entry or an established outperformer?

Karnataka Bank Ltd is a re-entry — it briefly dropped off the outperformance list but has now returned. Re-entries can signal renewed strength.

What are the growth catalysts for Karnataka Bank Ltd?

Karnataka Bank Ltd has 3 key growth catalysts identified from recent earnings analysis

  • Asset Quality Improvement — Intensified efforts in regional collection centres and recovery of technically written-off accounts.
  • Value Added Product Mix Shift — Shifting from low-yielding corporate loans to higher-yielding retail and MSME loans.
  • NIM expansion of 20 bps QoQ — Driven by reduction in cost of deposits from 5.5% to 5.43% and focus on RAM segment.

What are the key risks in Karnataka Bank Ltd?

Karnataka Bank Ltd has 2 key risks worth monitoring

  • [MEDIUM] Stress in MSME and housing segments within SMA-2 accounts — MSME stress was linked to CMA renewals and working capital facility delays.
  • [LOW] Pressure on yields due to repo rate cuts impacting EBLR-linked loans — 77-80% of the loan book is EBLR-based, leading to immediate repricing of assets.

What did Karnataka Bank Ltd's management say in the latest earnings call?

In Q3 FY26, Karnataka Bank Ltd's management highlighted

  • "Minimum CD ratio, our aim is to take it to 80%, but it maybe very aggressive target. But unless and until we increase our CD ratio to that level. [Pr..."
  • "Therefore, priority is to increase the CD ratio, Mr. Choksey, that I think if you ask me, CD ratio is 80%. NIM, as I was always telling 3% plus. [Pre..."
  • "Regarding focus area, as I told you earlier, and again, I am repeating, the retail, mid-corporates, retail, MSME, housing and gold loan. [Initiative:..."

What is Karnataka Bank Ltd's management guidance for growth?

Karnataka Bank Ltd's management has provided the following forward guidance for FY26

  • Revenue growth target: 15%
  • OPM guidance: 3%
  • Management tone: bullish
  • Milestone: [LOWERED] CD Ratio: 80% → 76% to 80%

What sector-specific metrics matter most for Karnataka Bank Ltd?

Karnataka Bank Ltd's most important sub-sector-specific KPIs from the latest concall

  • Net Interest Margin: 2.92% (YoY -10 bps) (QoQ +20 bps) — Improvement driven by lower cost of deposits and focus on RAM segment.
  • Gross NPA Ratio: 3.32% (YoY +21 bps) (QoQ -1 bps) — Marginal improvement QoQ due to intensified collection efforts.
  • Net NPA Ratio: 1.31% (YoY -8 bps) (QoQ -4 bps) — Reflects intensified efforts to control slippages and improve recovery efficiency.
  • CASA Ratio: 31.53% (QoQ +52 bps) — Focused strategies to accelerate CASA growth and reduce high-cost bulk deposits.
  • Provision Coverage Ratio: 80.90% (YoY +26 bps) (QoQ -15 bps) — Accelerated provisioning undertaken to strengthen the balance sheet.
  • CD Ratio: 74.23% (YoY -361 bps) (QoQ +260 bps) — Continuous effort to increase the CD ratio through RAM segment focus.

Is Karnataka Bank Ltd worth studying for long term investment?

Based on quantitative research signals, here is why Karnataka Bank Ltd may be worth studying

  • Earnings growing at +2.5% YoY
  • Cash flow is positive — CFO ₹210 Cr

What is the investment thesis for Karnataka Bank Ltd?

Karnataka Bank Ltd investment thesis summary:

Research Signals (Bull Case)

  • Growth catalyst: Asset Quality Improvement

Risk Factors (Bear Case)

  • Margins under pressure
  • Key risk: Stress in MSME and housing segments within SMA-2 accounts

What is the future outlook for Karnataka Bank Ltd?

Karnataka Bank Ltd's forward outlook based on current data signals

  • Earnings Trend: turning around (inflection up)
  • Revenue Trend: inflecting downward
  • Valuation: Fairly Valued
  • Key Catalyst: Asset Quality Improvement
  • Key Risk: Stress in MSME and housing segments within SMA-2 accounts

The above FAQs are generated from publicly available earnings data and conference call transcripts. This is educational research only. Sector Alpha is not SEBI registered and does not provide investment advice.