Karur Vysya Bank Ltd — Q1 FY27 earnings call
Summary generated by AI from the official transcript Karur Vysya Bank Ltd filed with BSE on 24 Jul 2026. Every statement cites a verbatim quote from that document — open any citation to read it. This is a record of what management said, not a recommendation. How we check these summaries
The short read
Karur Vysya Bank reported total business of INR2,27,267 crores as of 30th June 2026, with advances at INR1,04,680 crores and deposits at INR1,22,587 crores, each growing 6% quarter-on-quarter. Net interest margin was maintained at 4.26%, net profit for the quarter was 756 crores, up 4% quarter-on-quarter and 45% year-on-year, while gross NPA declined marginally to 0.74% and net NPA remained steady at 0.19%. Management described the quarter's growth as broad-based across retail, commercial and corporate segments, while noting a sequential decline in noninterest income due to lower write-off recoveries and one-off items in the prior quarter.
Numbers mentioned
Total business: INR2,27,267 crores (Q1 FY27)
p. 3
“the bank's total business reached INR2,27,267 crores, reflecting our sustained growth momentum in the first quarter with an overall business increase of 6% quarter-on-quarter and year-on-year growth of 16%”
B. Ramesh Babu, page 3 of the filed PDF · View the filing
Advances: INR1,04,680 crores (Q1 FY27)
p. 3
“Advances rose to INR1,04,680 crores, representing growth of 6% again quarter-on-quarter”
B. Ramesh Babu, page 3 of the filed PDF · View the filing
Deposits: INR1,22,587 crores (Q1 FY27)
p. 3
“deposits increased to INR1,22,587 crores, achieving a quarter-on-quarter growth at the rate of 6%”
B. Ramesh Babu, page 3 of the filed PDF · View the filing
Net interest margin: 4.26% (Q1 FY27)
p. 5
“we could successfully navigate the quarter and maintain our net interest margin at 4.26”
B. Ramesh Babu, page 5 of the filed PDF · View the filing
Operating profit: 1,096 crores (Q1 FY27)
p. 6
“The operating profit for the quarter was 1,096 crores, reflecting a 36% increase compared to the same quarter in the previous year, but a 12% decline sequentially”
B. Ramesh Babu, page 6 of the filed PDF · View the filing
Net interest income growth: 32% year-on-year (Q1 FY27)
p. 6
“Net interest income has grown by 32% year-on-year, depicting highest growth in the last 5 years and 5% sequentially”
B. Ramesh Babu, page 6 of the filed PDF · View the filing
Noninterest income: 442 crores (Q1 FY27)
p. 6
“noninterest income for the period stood at 442 crores, down from 616 crores in the previous quarter, so by 28% sequentially, which is a reduction of 174 crores”
B. Ramesh Babu, page 6 of the filed PDF · View the filing
Net profit: 756 crores (Q1 FY27)
p. 7
“Net profit for the quarter this quarter was at 756 crores, an increase of 4% quarter-on-quarter and 45% year-on-year”
B. Ramesh Babu, page 7 of the filed PDF · View the filing
Credit cost: 0.33% annualized (Q1 FY27)
p. 7
“an allocation of 90 crores was made towards NPA migrations, standard assets and restructured assets, resulting in a credit cost of 0.33% annualized”
B. Ramesh Babu, page 7 of the filed PDF · View the filing
Gross slippages: 138 crores (Q1 FY27)
p. 7
“Gross slippages for the quarter amounted to 138 crores, representing 0.13% if we annualize it comes to 0.53% of the loan book sequentially lower from 187 crores slippages during last quarter”
B. Ramesh Babu, page 7 of the filed PDF · View the filing
Gross NPA: 0.74% (Q1 FY27)
p. 7
“our gross NPA has declined marginally by 1% to 0.74%”
B. Ramesh Babu, page 7 of the filed PDF · View the filing
Net NPA: 0.19% (Q1 FY27)
p. 8
“Our net NPA remains steady at 0.19%, and we are committed to maintaining net NPA levels below 1% of our loan portfolio”
B. Ramesh Babu, page 8 of the filed PDF · View the filing
CRAR Basel III: 18.61% (Q1 FY27)
p. 8
“Our CRAR Basel III continues to be healthy and is at 18.61%, providing us comfortable headroom for growth”
B. Ramesh Babu, page 8 of the filed PDF · View the filing
Liquidity coverage ratio: 123.61% (Q1 FY27)
p. 8
“Our liquidity coverage ratio for the quarter is at 123.61%, and we would maintain this in the range of 115% to 120%”
B. Ramesh Babu, page 8 of the filed PDF · View the filing
Yield on advances: 10.01% (Q1 FY27)
p. 6
“The yield on advances increased by 8 basis points during the quarter and remained at 10.01%”
B. Ramesh Babu, page 6 of the filed PDF · View the filing
ROA: 2.11% (Q1 FY27)
p. 7
“The ROA for the quarter stands at 2.11%, marginally better than 1 basis point from previous quarter”
B. Ramesh Babu, page 7 of the filed PDF · View the filing
What management said it would do
A record of statements made on the call, in the words management used. Parakho does not forecast, endorse or assess them, and their presence here is not a view on whether they will happen.
Net interest margin — 3.7% to 3.8% · FY27
stated conditionally by B. Ramesh Babu
p. 6
“However, we are not changing the full year guidance, which would be reviewed at the end of September.”
B. Ramesh Babu, page 6 of the filed PDF · View the filing
Net interest margin — 4% plus · next quarter
stated conditionally by B. Ramesh Babu
p. 6
“With the current visibility, NIM may remain at the levels of 4% plus in the next quarter.”
B. Ramesh Babu, page 6 of the filed PDF · View the filing
Credit growth — 1% or 2% over industry growth · rest of the year
stated firmly by B. Ramesh Babu
p. 8
“our guidance for credit growth of 1% or 2% over the industry growth will continue for the rest of the quarters.”
B. Ramesh Babu, page 8 of the filed PDF · View the filing
Gross NPA — less than 1.5% · FY27
stated firmly by B. Ramesh Babu
p. 8
“Our GNPA is expected to be less than 1.5%.”
B. Ramesh Babu, page 8 of the filed PDF · View the filing
Net NPA — less than 1% · FY27
stated firmly by B. Ramesh Babu
p. 8
“Net NPA will be less than 1% and slippages to be less than 1% of our loan book.”
B. Ramesh Babu, page 8 of the filed PDF · View the filing
Portfolio yield on investments — around 7% · exit quarter of FY27
stated as an aspiration by B. Ramesh Babu
p. 6
“Our aspiration is to improve the portfolio yield to around 7% by the exit quarter of '26, '27.”
B. Ramesh Babu, page 6 of the filed PDF · View the filing
Cost of deposits — 5 to 10 basis points increase · next quarter
stated firmly by B. Ramesh Babu
p. 6
“We expect 5 to 10 basis points increase in next quarter.”
B. Ramesh Babu, page 6 of the filed PDF · View the filing
Yield on advances — reduction of 10 basis points · next quarter
stated firmly by B. Ramesh Babu
p. 6
“we anticipate a reduction of 10 basis points in the yield on advances in the next quarter”
B. Ramesh Babu, page 6 of the filed PDF · View the filing
Branch expansion — 25 branches · before the end of this quarter
stated firmly by B. Ramesh Babu
p. 8
“so we will be completing 25 branches before the end of this quarter and the balance before the end”
B. Ramesh Babu, page 8 of the filed PDF · View the filing
Credit cost — much lower than 1%
stated as an aspiration by B. Ramesh Babu
p. 12
“though we indicate 1%, I somehow feel it can be much lower than that.”
B. Ramesh Babu, page 12 of the filed PDF · View the filing
Cost-to-income ratio — between 40 to 45%
stated as an aspiration by B. Ramesh Babu
p. 17
“it may not cross our 45% to 50% usually the bracket what we indicate for the cost-to-income ratio, 41.74 may become 42.5 or 43, something like that.”
B. Ramesh Babu, page 17 of the filed PDF · View the filing
FCNR deposit base — double or triple current USD130 million base
stated as an aspiration by B. Ramesh Babu
p. 19
“So we will try to either double it or triple it what all is possible because it's a great occasion for us to increase the number of NRI customers.”
B. Ramesh Babu, page 19 of the filed PDF · View the filing
SME loan growth — 18% · FY27
stated conditionally by B. Ramesh Babu
p. 9
“we are reasonably okay that we'll be able to grow at 18% for this year.”
B. Ramesh Babu, page 9 of the filed PDF · View the filing
Q&A highlights
Management's answers to analyst questions, in Parakho's words rather than a transcript. Each row names who answered and carries the verbatim quote it was drawn from.
Management said they will look at the texture of system growth and avoid returning to a corporate-heavy mix.
Answered by B. Ramesh Babu
Asked by Jai Mundhra: Whether the bank will maintain growth 100-200 bps above system growth given system growth has risen to around 18%.
p. 9
“If under the RAM, if the system is growing, we will try to be 1% above that. If the system is growing well in the corporate, then we have to be more cautious in looking at that, not to commit our earlier mistake.”
B. Ramesh Babu, page 9 of the filed PDF · View the filing
Management attributed last quarter's flat growth to pricing competition and said Q1 growth of 6% supports an 18% full-year expectation.
Answered by B. Ramesh Babu
Asked by Jai Mundhra: Whether SME/commercial loan growth slowdown from 18-20% to 12-13% Y-o-Y reflects a deliberate course correction.
p. 9
“Last year, last quarter was an aberration. If you take out the Q4 of last year, and overall, our growth will be against 16% to 17% last year also.”
B. Ramesh Babu, page 9 of the filed PDF · View the filing
The ED provided figures on applications and disbursements under ECLGS for commercial and corporate segments.
Answered by Sankar Balabhadrapatruni
Asked by Jai Mundhra: ECLGS disbursement details in the commercial segment.
p. 10
“Jai, under ECLGS in commercial segment, 2,232 customers have applied till now. Now we are screening the applications. And till now during Q2, INR140 crores has been disbursed.”
Sankar Balabhadrapatruni, page 10 of the filed PDF · View the filing
Management estimated a yield range and noted agri gold loans get additional PSL benefit.
Answered by B. Ramesh Babu
Asked by Jai Mundhra: Blended yield on gold loans across retail and agri.
p. 10
“you can think of between 11% to 12%, we can think that can be the yield we can get in.”
B. Ramesh Babu, page 10 of the filed PDF · View the filing
Management explained the recovery mix varies by account and confirmed the amount was in interest recovery rather than write-off recovery.
Answered by B. Ramesh Babu
Asked by Pritesh Bumb: Why interest recovery income was reported without corresponding write-off recovery this quarter.
p. 11
“Had it been there reflected in the write-off recovery. So that is a factor which is a difference between the last quarter and this quarter. True. It has come in interest and not in the write-off recovery amount. True.”
B. Ramesh Babu, page 11 of the filed PDF · View the filing
Management said ECL should not majorly hit the bank given prior provisioning and expects credit cost to be lower than the indicated 1%.
Answered by B. Ramesh Babu
Asked by Pritesh Bumb: Outlook on credit cost given ECL transition and current asset quality.
p. 12
“ECL should not majorly hit us for 2 reasons. One is our SMA numbers are good more or less, not only now for the last few years, 4, 5 years, 3, 4 years”
B. Ramesh Babu, page 12 of the filed PDF · View the filing
Management pointed to non-fund income, guarantee business, TPP income and CASA-driven cost reduction as offsetting levers.
Answered by B. Ramesh Babu
Asked by Pritesh Bumb: What will replace the profitability contribution from a shrinking write-off recovery pool.
p. 12
“there are a few levers which are available to us. One is we have been mentioning that our non-fund business, so we have been trying for the last 1 year.”
B. Ramesh Babu, page 12 of the filed PDF · View the filing
Management confirmed the Board is aware and will take a call at the appropriate time with adequate transition planning.
Answered by B. Ramesh Babu
Asked by Pritesh Bumb: Update on the MD's earlier stated intention to step down within two years and Board succession planning.
p. 13
“Board is already abreast of this. They are looking at it. At the appropriate time, call will be taken, and there will be sufficient time for the transition and for the handholding and for grooming also.”
B. Ramesh Babu, page 13 of the filed PDF · View the filing
Management said quarter-end flows supported growth but the overall focus remains on sustaining CASA share.
Answered by B. Ramesh Babu
Asked by Suraj Das: Whether the strong CA growth this quarter is sustainable or driven by lumpy quarter-end inflows.
p. 13
“this quarter end flows have also supported there in that. And every quarter, whether that will be coming or not, we will not be knowing.”
B. Ramesh Babu, page 13 of the filed PDF · View the filing
Management confirmed further repricing will push costs up but said mobilizing TD alongside CASA is necessary given current profitable yields.
Answered by B. Ramesh Babu
Asked by Suraj Das: Whether recent TD rate hikes and FCNR focus will raise cost of deposits further.
p. 14
“That is the reason I have mentioned that some sort of a hike will be there in the cost of deposits because the further repricing, what all are happening in the next few quarters also”
B. Ramesh Babu, page 14 of the filed PDF · View the filing
Management said the earlier slowdown was due to organizational changes at partner Axio following its acquisition by Amazon, not credit discomfort.
Answered by B. Ramesh Babu
Asked by Suraj Das: Whether BNPL growth traction will continue given past caution around the segment.
p. 15
“We have not reduced this business on account of any discomfort. It is because the organization structure is undergoing in Axio.”
B. Ramesh Babu, page 15 of the filed PDF · View the filing
Management said fixed rates lock in high yields and insulate the bank when rates eventually fall.
Answered by B. Ramesh Babu
Asked by M.B. Mahesh: Rationale for increasing the fixed-rate loan portfolio share amid rising cost of funds.
p. 15
“tomorrow, when this FCNR funding comes up and OFCB comes and the market is awash with liquidity, and then automatic rates come down, then you cannot reduce when we are giving a loan of 1 year”
B. Ramesh Babu, page 15 of the filed PDF · View the filing
CFO gave the split between NPA provisions and standard asset provisions.
Answered by Ramshankar R.
Asked by M.B. Mahesh: Breakup of the quarter's provision line.
p. 15
“The INR90 crores provisions what we have made during the quarter comprise NPA provisions of INR68 crores for standard assets provision Rs 22 cr.”
Ramshankar R., page 15 of the filed PDF · View the filing
Management said housing pricing competition from PSBs makes it uneconomical, while LAP/commercial property lending benefits from internal valuation controls.
Answered by B. Ramesh Babu
Asked by M.B. Mahesh: Why LAP portfolio is growing while housing loans lag.
p. 16
“there's a huge competition with the public sector banks who are offering the finest pricing.”
B. Ramesh Babu, page 16 of the filed PDF · View the filing
Management said cost-to-income may rise modestly but remain within the 45-50% band as branches take time to break even.
Answered by B. Ramesh Babu
Asked by Parth Gutka: How branch expansion to 50 branches this year will affect opex growth and cost-to-income ratio.
p. 17
“it may have a bearing of 0.5% to 1%. But -- so it gets normalized over a period of a few years, that's two years once the branch starts becoming breakeven.”
B. Ramesh Babu, page 17 of the filed PDF · View the filing
Management said margin call mechanisms are strengthened and gold loan share is targeted at 30-35% of advances without overdependence.
Answered by B. Ramesh Babu
Asked by Anand Dama: Growth outlook and asset quality concerns for the gold loan segment given price volatility.
p. 18
“our internal indication is between 30% to 35% of the overall portfolio or 32%, if you can say, of the overall advances gold loan can be.”
B. Ramesh Babu, page 18 of the filed PDF · View the filing
Management said it will assess after the second quarter before revising full-year guidance, noting downside risk is limited.
Answered by B. Ramesh Babu
Asked by Anand Dama: Realistic margin expectations for the remaining nine months given rising MCLR and deposit costs.
p. 18
“the downside is minimum and upside is there. So that way, if we are going to move to 3.6% and 3.5%, that's a cause of concern. But we are not on the trajectory”
B. Ramesh Babu, page 18 of the filed PDF · View the filing
Management described targeting smaller-ticket FCNR deposits and gave ECLGS application/disbursement figures.
Answered by B. Ramesh Babu
Asked by Anand Dama: FCNR deposit mobilization guidance and ECLGS disbursement targets.
p. 18
“we will see our current base before this launch of the scheme is around USD130 million under FCNR.”
B. Ramesh Babu, page 18 of the filed PDF · View the filing
Management said textile exposure at about 5% of the book could see some impact but working capital utilization and SMA numbers show no stress yet.
Answered by B. Ramesh Babu
Asked by Gaurav Jani: Impact of the geopolitical conflict on the SME and corporate book, roughly 50% of the portfolio.
p. 20
“our working capital utilization is running between 77% to 80% only. There is no spike in that.”
B. Ramesh Babu, page 20 of the filed PDF · View the filing
Management said the LTV cushion of about 35% and gold-backing of 92% of agri portfolio insulate against price declines.
Answered by B. Ramesh Babu
Asked by Gaurav Jani: Potential impact of El Nino-related rainfall deficit on the gold loan portfolio.
p. 20
“even if there is a reduction in the gold prices by 10% to 15%, we feel sufficiently we are insulated.”
B. Ramesh Babu, page 20 of the filed PDF · View the filing
Management said staff strength increases this year may narrow the gap somewhat but the bank will still target its stated ROA range.
Answered by B. Ramesh Babu
Asked by Gaurav Jani: Whether the wide gap between loan CAGR and opex CAGR seen in FY24-26 will continue.
p. 22
“the spike in the staff strength, which used to be 7,000, it has reached 9,500.”
B. Ramesh Babu, page 22 of the filed PDF · View the filing
CFO said sufficient buffers exist and it would be premature to indicate a normalized credit cost under the new regime.
Answered by Ramshankar R.
Asked by Gaurav Jani: Sustainable impact of ECL transition on credit cost over the next year.
p. 22
“it will be premature at this stage to indicate any normalized credit cost under the new region.”
Ramshankar R., page 22 of the filed PDF · View the filing
Management said system liquidity does not automatically translate into bank deposits since customers may prefer other avenues.
Answered by B. Ramesh Babu
Asked by Subramanian: Whether comfortable system-level banking liquidity will help ease the bank's cost of funds.
p. 23
“liquidity per se will not transfer into the deposits, and it is the mindset of the customer.”
B. Ramesh Babu, page 23 of the filed PDF · View the filing
Risks flagged
Yield on advances expected to decline due to competition and customer retention pressure
p. 6
“competition and retention of customers may bring down the yields going forward, and we anticipate a reduction of 10 basis points in the yield on advances in the next quarter”
B. Ramesh Babu, page 6 of the filed PDF · View the filing
Cost of deposits expected to rise due to repricing
p. 6
“We expect 5 to 10 basis points increase in next quarter.”
B. Ramesh Babu, page 6 of the filed PDF · View the filing
Spike in SMA 30 levels
p. 7
“with a spike in SMA 30 levels from 0.17% to 0.22% sequentially”
B. Ramesh Babu, page 7 of the filed PDF · View the filing
Delayed branch expansion due to logistics and premises availability
p. 8
“external factors like availability of proper premises and other logistics and agreement, these things is taking some time”
B. Ramesh Babu, page 8 of the filed PDF · View the filing
Provision retained for sectors affected by geopolitical tensions
p. 7
“we had made a provision of 163 crores towards sectors affected during the ongoing geopolitical tensions during last quarter, and we have retained the same as things still remain the same”
B. Ramesh Babu, page 7 of the filed PDF · View the filing
Textile sector exposure could be hit by export order declines from the conflict
p. 19
“that is overall 5% of our total portfolio is under the textile, and that may be hit. That's what we thought because exports will have an impact on that.”
B. Ramesh Babu, page 19 of the filed PDF · View the filing
Labor shortage affecting the textile sector
p. 20
“the major problem what textile sector is facing now is the shortage of labor.”
B. Ramesh Babu, page 20 of the filed PDF · View the filing
Potential gold loan growth impact from El Nino-related rainfall deficit
p. 21
“I'll tell you, suppose that is impacted, it is not only for KVB, it is for the whole industry.”
B. Ramesh Babu, page 21 of the filed PDF · View the filing
Fixed-rate loan mix support to margins may reduce in coming quarters
p. 6
“The support from such mix may come down in the coming quarters.”
B. Ramesh Babu, page 6 of the filed PDF · View the filing
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