Over the last few years, KMB has undoubtedly proven its competitive edge over its private sector peers with higher fee income generation capability, asset quality management as well as effectively managing financial business subsidiaries. Resultantly, the stock has traded at a premium to its peers despite having lower return ratios. However, we expect some negative surprises on asset quality and profitability in FY17E post completion of merger of IVB. We continue to assign HOLD recommendation on the stock with a Target Price of Rs794 (wherein the merged entity is valued at 4xFY18E adjusted BV and the subsidiaries fetch Rs145/share...