Target: ₹375CMP: ₹340.10In Q1 FY27, Karur Vysys Bank’s net interest margin (NIM) was at 4.26 per cent, up 40 bps year on year. The management maintained its prior FY27 NIM guidance in the range of 3.7-3.8 per cent. The management expects NIM to remain above 4 per cent in Q2. The margin (4.26 per cent) excludes the one-off interest income from the income-tax refund, which contributed 8 bps during the quarter. For the quarter, interest component in recovery from written-off accounts was ₹24 crore. Loan growth, though a tad lower than system, was healthy in the absolute sense: The advances for the bank stood at ₹1,04,090 crore, up 17 per cent y-o-y. The bank had earlier guided that they would grow 100-200 bps above banking system growth. However, the management stated that the system has moved early and moved into corporate lending, an area they had relatively de-focused. Gross NPA additions amounted to ₹138 crore for Q1FY27, translating to an annualised slippage ratio of 0.54 per cent for the quarter. Gross NPA additions had amounted to ₹187 crore during Q4FY26. Provisions were ₹90 crore, down 23.6 per cent, translating to calculated annualised credit cost of 36 bps. In Q4-FY26, KVB had made a one-time prudential provision of ₹163 crore towards sectors identified as potentially impacted by geopolitical headwinds. There was no such provision in Q1FY27.We maintain Buy rating on the bank with a revised price target of ₹375. Published on July 21, 2026