Karnataka Bank's Q2 FY25 financial results show mixed performance, MarketsMOJO advises 'Hold' on stock.

Karnataka Bank, a midcap private bank, recently declared its financial results for the quarter ending September 2024. The stock call for the bank by MarketsMOJO is ‘Hold’.

The bank’s financial performance for the quarter has remained flat, with a score of 5 out of 10, as compared to the previous quarter. However, there are some positive aspects to the bank’s performance based on the Sep 2024 financials.

One of the key highlights is the growth in Profit Before Tax (PBT) less Other Income, which has increased by 78.1% to Rs 159.11 crore, as compared to the average PBT of the previous four quarters at Rs 89.34 crore. This indicates a positive trend in the near term for PBT.

Another positive aspect is the Gross Non-Performing Assets (NPA) which is at its lowest in the last five quarters at 3.21%. This shows that the proportion of stressed loans given by the bank is decreasing.

On the other hand, the Non-Operating Income for the quarter is 62.91% of the PBT. This indicates that the bank’s income from non-business activities is high, which may not be a sustainable business model.

In terms of dividends, Karnataka Bank has been consistently distributing higher dividends from its profits, with the Dividend per Share (DPS) at its highest at Rs 5.50 and growing each year in the last five years.

Overall, while the bank’s financial performance for the quarter may have been flat, there are some positive and negative aspects to consider. Investors are advised to hold their position in the stock, as recommended by MarketsMOJO.