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Karnataka Bank has reported 10% growth in net profit at Rs 331.08 crore
for the quarter ended December 2023 (Q3FY2024). The bank has posted 1% decline
in net interest income (NII) in Q3FY2024. The Net Interest Margin (NIM) of the
bank eased to 3.46% in Q3FY2024 compared to 3.81% in the corresponding quarter
of previous year and 3.58% in the previous quarter.
On business front, the
bank as has posted 9% growth in business with 9% rise in loan book. The asset
quality of the bank was impacted due to high slippages of loans in Q3FY2024.
Bank has raised the credit to deposit ratio to 74.0% at end December 2023 from
73.9% at end December 2022. The CASA ratio of the bank has declined marginally to
31.5% at end December 2023 from 31.9% at end December 2022.
Asset quality hit by
high slippages: The bank has witnessed deterioration in asset quality in Q3FY2024
on account of high fresh slippages of loans.
The fresh slippages of
loans stood at Rs 516 crore in Q3FY2024 compared with 315 crore in previous
quarter and Rs 377 crore in the corresponding quarter last year.
The recoveries and
upgradations of NPAs stood at Rs 174 crore and the write-off of loans was at Rs
130 crore in Q3FY2024.
The standard
restructured loan book of the bank stood at Rs 1837 crore end December 2023
compared to Rs 2214 crore a quarter ago.
Provision coverage ratio
eased to 80.75% at end December 2023 compared to 83.22% a quarter ago and
80.21% a year ago.
The capital adequacy
ratio of the bank stood at 15.9% with Tier I ratio at 13.7% at end December
2023.
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Asset Quality
Indicators: KarnatakaBank
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|
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Dec/23
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Sep/23
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Jun/23
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Mar/23
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Dec/22
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Variation
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QoQ
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YTD
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YoY
|
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Gross NPA (Rs Crore)
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2536.72
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2324.19
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2315.88
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2292.91
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2085.73
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9
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11
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22
|
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Net NPA (Rs Crore)
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1060.06
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888.94
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877.71
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1021.27
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1040.88
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19
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4
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2
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% Gross NPA
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3.64
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3.47
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3.68
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3.74
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3.28
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17
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-10
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36
|
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% Net NPA
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1.55
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1.36
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1.43
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1.70
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1.66
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19
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-15
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-11
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% PCR
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80.75
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83.22
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83.47
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80.86
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80.21
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-247
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-11
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54
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% CRAR - Basel III
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15.88
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16.20
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17.00
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17.45
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15.13
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-32
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-157
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75
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% CRAR - Tier I -
Basel III
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13.66
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13.11
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13.80
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14.18
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12.20
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55
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-52
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146
|
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Variation in basis
points for figures given in percentages and in % for figures in Rs crore
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Business Highlights:
Moderate business
growth: The
business of the bank has increased 9% YoY to Rs 160411 crore end December 2023,
driven by 9% rise in advances to Rs 68216 crore. Deposits also rose 9% to Rs
92195 crore at end December 2023.
CASA deposits ratio eases
marginally: The CASA deposits of the bank increased 7% YoY to Rs 28995 crore
at end December 2023. CASA ratio declined to 31.5% at end December 2023
compared to 31.9% at end December 2022, eased from also declined from 31.9% a
quarter ago. The term deposits have increased 10% to Rs 63200 crore end
December 2023.
Strong corporate loan
growth: Within the loan book, the retail loans rose 8% YoY
to Rs 32403 crore at end December 2023, while credit to MSME was flat at Rs
18077 crore at end December 2023. The corporate credit has surged 24% to Rs
17736 crore end December 2023.
Margins decline: The bank has showed 76
bps YoY jump in cost of deposits to 5.30%, while yield on advances increased only
45 bps YoY to 9.90% in Q3FY2024. Thus, the NIM has declined 35 bps YoY to
3.46%.
Branch expansion: The bank has added 1
branches and 2 ATMs in Q3FY2024, taking overall tally to 904 branches and 1482
ATM`s end December 2023.
Book value of the bank stood at Rs
270.5 per share at end December 2023, while the adjusted book value (net of
NNPA and 10% of restructured advances) was Rs 235.4 per share at end December
2023.
Quarterly Performance
NII declines on lower NIMs:
Bank has recorded 14%
increase in the interest earned at Rs 2112.61 crore, while interest expenses
increased 26% to Rs 1285.01 crore in Q3FY2024. NII fell 1% to Rs 827.60 crore
in the quarter ended December 2023.
Non-interest income
jumps: Bank
has posted strong 59% surge in the overall non-interest income to Rs 326.08
crore in the quarter ended December 2023.
Expenses ratio jumps: The operating expenses
of the bank increased 21% to Rs 613.48 crore, as other expenses moved up 24% to
Rs 277.17 crore, while employee expenses increased 18% to Rs 336.31 crore in
Q3FY2024. Cost to income ratio moved up to 53.2% in Q3FY2024 compared with
48.8% in Q3FY2023, allowing the operating profit to increase 2% to Rs 540.20
crore.
Provisions and contingencies
decline: The
bank has showed 12% decline in provisions to Rs 144.41 crore.
Effective tax rate declined to 16.3% in Q3FY2024 from 18.1% in Q3FY2023. Net Profit rose by 10%
YoY to Rs 331.08 crore during quarter ended December 2023.
Financial Performance
9MFY2024:
Bank has posted 25%
increase in net profit to Rs 1032.04 crore in the nine month ended December
2023 (9MFY2024). The net interest income increased 6% to Rs 2464.69 crore,
while non-interest income moved up 51% to Rs 899.51 crore, pushing up net total
income by 15% to Rs 3364.20 crore in 9MFY2024. The operating expenses increased
21% to Rs 1700.68 crore, while provision and contingencies declined 19% to Rs
415.85 crore, allowing profit before tax to increase 24% to Rs 1247.67 crore in
9MFY2024. The cost-to-income ratio rose to 50.6% in 9MFY2024 compared to 47.9%
in 9MFY2023. An effective tax rate declined to 17.3% in 9MFY2024 compared to
18.1% in 9MFY2023. The net profit has increased 25% to Rs 1032.04 crore in
9MFY2024.
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Karnataka Bank: Results
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Particulars
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2312 (3)
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2212 (3)
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Var %
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2312 (9)
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2212 (9)
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Var %
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2303 (12)
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2203 (12)
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Var %
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Interest Earned
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2112.61
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1850.80
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14
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6097.94
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5250.93
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16
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7220.23
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6221.66
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16
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Interest Expended
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1285.01
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1016.04
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26
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3633.25
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2925.88
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24
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4035.13
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3730.63
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8
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Net Interest Income
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827.60
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834.76
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-1
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2464.69
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2325.05
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6
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3185.10
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2491.03
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28
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Other Income
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326.08
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204.51
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59
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899.51
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597.34
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51
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992.58
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953.88
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4
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Net Total Income
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1153.68
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1039.27
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11
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3364.20
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2922.39
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15
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4177.68
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3444.91
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21
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Operating Expenses
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613.48
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507.40
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21
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1700.68
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1399.92
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21
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1969.45
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1810.91
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9
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Operating Profits
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540.20
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531.87
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2
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1663.52
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1522.47
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9
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2208.23
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1634.00
|
35
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Provisions &
Contingencies
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144.41
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164.87
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-12
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415.85
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513.93
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-19
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767.19
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939.44
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-18
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Profit Before Tax
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395.79
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367.00
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8
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1247.67
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1008.54
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24
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1441.04
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694.56
|
107
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Provision for tax
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64.71
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66.32
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-2
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215.63
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182.05
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18
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260.80
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185.94
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40
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PAT
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331.08
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300.68
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10
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1032.04
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826.49
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25
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1180.24
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508.62
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132
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EPS*(Rs)
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38.2
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34.7
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|
39.7
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31.8
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34.0
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14.7
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Adj BV (Rs)
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235.4
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195.2
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235.4
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195.2
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206.5
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155.8
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* Annualized on current equity of
Rs 346.90 crore. Face Value: Rs 10, Figures in Rs crore
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Source: Capitaline Corporate
Database
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