Karnataka Bank is currently the top gainer on the BSE, with the stock up almost 8% at Rs. 268. The counter opened at Rs. 257.20 versus a previous close of Rs. 248.50, and traded in the Rs. 252.30 to 271.20 band, with VWAP at Rs. 261.94. The move also pushed the stock closer to its 52-week high of Rs. 275.10 (52-week low: Rs. 169.05), with about 5.34 lakh shares traded and turnover of Rs. 13.98 crore; market capitalisation stood near Rs. 10,160 crore.

The rally is a direct reaction to a sharp improvement in quarterly profitability, even as headline income was softer. Karnataka Bank reported Q4FY26 net profit of Rs. 408crore, up 62% YoY and 40% QoQ, supported by a steady rise in core earnings and operating leverage. Net interest income grew 7.98% YoY to Rs. 843 crore, while NIM improved to 3.07% from 2.98% a year ago and 2.92% in Q3FY26, helping operating profit jump 64% YoY to Rs. 615.04 crore. Total income, however, dipped 2.4% YoY to Rs. 2,656 crore, making the print more about mix and margins than top-line acceleration.

Asset-quality trends added to the positive read-through, with gross NPAs down to 2.78% (from 3.08% YoY and 3.32% QoQ) and net NPAs improving to 0.98% (from 1.31% YoY and QoQ). Provision coverage ratio rose to 83.54%, but provisions themselves jumped to Rs. 90.34 crore versus Rs. 31.08 crore a year ago, suggesting the bank is simultaneously recognising better recoveries/collections while building buffers.

On the balance sheet, aggregate business rose 5% YoY to Rs. 1,92,119 crore, with deposits up 4% YoY to Rs. 1,08,779 crore and gross advances up 7% YoY to Rs. 83,340 crore. CASA deposits grew faster at 9.85% YoY to Rs. 36,559.66 crore, lifting the CASA ratio to 33.61%, which supports funding-cost control and margin stability. The board also recommended a final dividend of Rs. 5 per share for FY26; going forward, the market will track whether the NIM uptrend holds as loan growth outpaces deposits, and whether credit costs remain contained while the bank scales growth.