Karnataka Bank Shares: SEBI Analyst Says Cheap Valuations Alone May Not Spark A Rebound

Karnataka Bank’s stock has been struggling to break higher, sitting under all its major moving averages, including the 14-day, 50-day, and 200-day exponential moving averages. These levels are acting as resistance and highlight the weak trend.

Technical View

SEBI-registered analyst Deepak Pal stated that the Parabolic Stop and Reverse (SAR) indicator is displaying dots below recent candles, indicating some short-term buying interest, although momentum remains weak. 

He noted that the Moving Average Convergence Divergence (MACD) is flat, while the Relative Strength Index (RSI) at 46 places the stock in neutral territory, not far from oversold levels but without a clear reversal signal.

Fundamental View

Pal noted that Karnataka Bank still looks inexpensive next to its peers, pointing to a price-to-earnings ratio of just 5.69 and a price-to-book ratio of 0.55. 

He said the bank has delivered steady growth, with profits climbing at an annual pace of 24% over the past five years, a healthy return on equity of 14.18%, and net interest margins holding firm at 3.26% for three years.

He cautioned, however, that even with these positives, the stock is considered slightly “overvalued” relative to intrinsic value. 

Promoter holding is low, meaning institutional and retail investors drive most of the price action. The bank manages assets of ₹6,658 crore and reported quarterly revenue of ₹8,996.89 crore, he said.

Upcoming Events

Pal pointed to a few important dates investors are watching. Karnataka Bank’s board will meet on September 23 to decide on dividends and outline strategy. Then, on October 23, the bank is set to announce its second-quarter (Q2) results, which could influence near-term stock movement.

He also highlighted the recent appointment of Vijayakumar PH as the new Chief Financial Officer from September 12, and an analyst and investor roadshow held on September 11, which he said underscored the bank’s effort to boost transparency and confidence.

What Is The Retail Mood?

On Stocktwits, retail sentiment was ‘neutral’ amid ‘normal’ message volume.

Karnataka Bank’s stock has declined 17% so far in 2025.

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