Karur Vysya Bank Q3: Advances Jump 17%, Shares Hit Record High

Introduction

Shares of Karur Vysya Bank (KVB) surged to a new record high after the private sector lender announced a strong business update for the third quarter ending December 31, 2025. The bank reported double-digit growth in both advances and deposits, signaling sustained business momentum and reinforcing investor confidence. The positive operational performance led to a sharp rally in the stock, which outperformed the broader market.

Stellar Quarterly Performance

In an exchange filing, Karur Vysya Bank detailed its impressive performance for the October-December quarter. The bank's total advances grew by a significant 17.15% year-on-year (YoY) to reach ₹97,048 crore, up from ₹82,838 crore in the same period last year. On a sequential basis, advances increased by 4.66%.

Total deposits also saw healthy growth, rising 15.57% YoY to ₹1,15,000 crore compared to ₹99,155 crore a year ago. Quarter-on-quarter (QoQ), deposits grew by 3.71%. The bank's Current Account Savings Account (CASA) deposits increased by 10.76% YoY to ₹31,199 crore. Consequently, the bank's total business expanded by 16.29% YoY, reaching ₹2.12 trillion as of December 31, 2025.

Market Responds with a New High

The strong business figures were well-received by the market. KVB's stock rose as much as 3.7% during intraday trading to a new peak of ₹273.80 per share. This marked the biggest single-day gain since late December and was accompanied by unusually high trading volumes, with over 5.9 million shares changing hands on the NSE and BSE combined. Over the past year, the stock has delivered a return of approximately 45%, significantly outperforming the benchmark Nifty 50 index.

Q3 Performance Summary

Financial Health and Asset Quality

Karur Vysya Bank's growth is supported by a stable and improving financial base. For the first half of fiscal year 2026 (H1FY26), the bank's Net Interest Margin (NIM) improved to 3.86%, driven by higher yields on advances. Asset quality remains a key strength, with Gross Non-Performing Assets (GNPA) at a low 0.76% and Net Non-Performing Assets (NNPA) at 0.19% as of September 30, 2025. The bank has consistently reduced its NPA levels over the past four years, indicating robust risk management practices.

Strategic Loan Portfolio

The bank's growth is fueled by a well-diversified loan portfolio. It has a strategic focus on the commercial, retail, and agriculture segments. As of September 2025, commercial banking constituted 35.4% of its advances, followed by retail (25%) and agriculture (24%). The corporate banking segment accounted for the remaining 15%. This balanced approach helps mitigate concentration risk and taps into various growth drivers in the economy.

Strong Analyst Confidence

The bank's consistent performance has earned it a favorable view from market analysts. Of the 19 analysts that cover Karur Vysya Bank, 18 have issued a 'Buy' recommendation, while only one has a 'Sell' rating. Brokerages like Emkay Global Financial Services have maintained a 'BUY' rating with a target price of ₹270, citing expectations of continued credit growth and stable asset quality.

Outlook and Projections

Looking ahead, rating agencies and analysts expect Karur Vysya Bank to maintain its growth trajectory. CareEdge Ratings anticipates that the bank's focus on commercial and retail segments will continue to drive business. While there may be some pressure on Net Interest Margins due to industry-wide trends, the bank's asset quality is expected to remain stable in the medium term, supported by a moderate slippage ratio and adequate provisioning.

Conclusion

Karur Vysya Bank's Q3 business update highlights its strong operational execution and resilient growth model. The significant year-on-year increase in advances and deposits, coupled with stable asset quality, has solidified its position in the private banking sector. The positive market reaction, pushing the stock to a record high, reflects strong investor confidence in the bank's future prospects.