Over the last few years, Kotak Mahindra Bank has proven undoubtedly its competitive edge over other private banks through higher fee income generation capability, wellmanaged asset quality and well-handled other financial business subsidiaries. As a result, stock has traded at a premium to its peers despite having lower return ratios. We have introduced FY18E estimates for the bank and expect PAT of Rs26.7bn and Rs35.5bn in FY17E and FY18E, respectively. However, we expect some negative surprises on asset quality and profitability in FY16E post the merger with ING Vysya Bank. Consequently, we maintain our NEUTRAL view on the stock with a Fair Value of Rs727 (wherein the merged entity has been valued at 4xFY18E adjusted BV and the...