Budget 2021 Stock Picks With Anil Singhvi: Karnataka Bank is a top BUY for Market Guru; lists these 3 MAJOR reasons to buy this counter

Budget 2021 Stock Picks With Anil Singhvi: In today’s edition of Budget 2021 stocks, Zee Business brings you another top stock that will give bumper returns till the Budget 2021 is presented and even after that. Today's stock pick is Karnataka Bank. At 10:20 am, Karnataka Bank share price today was trading at Rs 62.70, on NSE, up by almost 4 per cent. Research Analyst Ashish Chaturvedi tells Managing Editor Anil Singhvi why Karnataka Bank stock is poised for high growth.  

Out of the total loan book of Karnataka Bank, 41 per cent accounts is for wholesale while it has 34 per cent exposure to retail loan. Karnataka Bank is operationally sound, but the best part is its asset quality, Chaturvedi said. 

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Even Karnataka Bank Capital Adequacy ratio is good, he added. Karnataka Bank gross NPA is 3.97 per cent, net NPA is 2.21 per cent and the CASA has increased from 27 per cent to 30 per cent. 

Karnataka Bank moratorium book which was at 51 per cent in earlier quarters and has now come down to just 11 per cent in September. In the December quarter results, it is expected to get down further, he said. 

The operating metrics are strong. 

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Karnataka Bank Stock Valuations 

The valuation of Karnataka Bank stock is attractive and it is available at a PE multiple of 4. The price to book at 0.3 is the cheapest among all the banks. This stock is expected to give high returns, he said. 

Anil Singhvi’s View on Karnataka Bank

The Market Guru called Karnataka Bank an excellent stock and had recommended this counter on previous occasions. Karnataka Bank stock has appreciated by over 50 per cent since then and he said that he expects a much stronger rally, going forward. He said that the management is completely professional and there is no promoter. There could be some bias in a promoter led company, he said.  

He said that Karnataka Bank valuations are very attractive. Another important positive is the gold loan business which is now coming towards the banks. The focus on retail business will help in rerating of the bank, Singhvi opined. The NPA recovery is going to be very strong.