The 35 reports from 13 analysts offering long term price targets
for Kotak Mahindra Bank Ltd. have an average target of 1536.75. The consensus estimate
represents an upside of 17.70%
from the last price of 1305.60.
Kotak recorded a marginal improvement of 1.6% YoY in interest income to Rs. 8,422cr in Q1FY21. Although the months of April and May had negligible collections, the company had strengthened its collections teams by moving key leadership and sales teams to collections, thus witnessing improvements in the months of June and July. Despite having a flat to negative loan growth, Net-interest income registered a healthy growth of 15.9% YoY to Rs. 4,793cr with NIM remaining flat YoY at 4.44% in the quarter. Non-interest income comprising of fees and treasury related services was also up 1.6% YoY to Rs. 3,901cr. The company has decided to increase its provisions...
Kotak Mahindra Bank (KMB) reported NII growth of 17.8% YoY and 4.6% QoQ despite advances declining by 1.9% YoY and 7.2% QoQ, reflecting strong quality of earnings at lower risk. NIM stood at 4.4%, down 8bps YoY and 32bps QoQ. Deposit flows were strong with a growth of 12.3% YoY, down marginally QoQ, despite the bank reducing its rates considerably during the quarter. The cost of SA stood at 4.22% compared to 5.23% in 4QFY20 and 5.51% in 1QFY20. With the bank having taken cuts in the latter part of the quarter, we expect SA rates to drop further in 2QFY21. On the back of this, coupled with a low-rate environment, the cost of funds dropped to 4.2% compared to ~4.6% in 4QFY20. This helped in sustaining strong margins even as calc....
KMB's s'lone earnings of Rs12.4bn (PLe: Rs15.7 bn) was a miss on back of slightly higher provisions and lower other income (as bank did not book any treasury gains). NII growth of 18% YoY stood out despite loan growth being flattish YoY as bank has been materially benefitting from lowering cost of funding (150bps SA rate cut in 3 months). Moratorium has come off to 9.65% v/s 26% in May with certain collections to be made from Morat 1.0, but could add to stress eventually from H2FY21 onwards. We continue to build 80100bps of credit cost and 150bps of slippages in FY21/FY22E respectively. In our view, the bank has a very resilient balance sheet to any shock with strong...
Kotak Mahindra (KMB) reported steady performance amidst Covid-19 pandemic with NII up 18/5% YoY/QoQ even as loan growth was muted (down 7% QoQ) and NIM moderation at 4.4% (down 9bps YoY). Deposit franchise remains strong despite cut in rates. CASA stood at 57%.
Consolidated PAT was at | 1853 crore, down 4% YoY. Overall performance of subsidiaries stayed healthy with Kotak Life Insurance reporting profitability at | 161 crore, up 20.1% YoY. Kotak Securities PAT healthy | 169 crore, up 53.6% YoY. Kotak Prime, non-banking arm, de-grew 55.5%...
27 July 2020 KMB reported a mixed quarter with weak earnings performance, affected by lower fee income, 32bp QoQ decline in margins and sharp sequential decline in loan growth. On the asset quality front, slippages were elevated, driving 45bp QoQ increase in GNPA ratio while provision coverage remained broadly stable. On the business front, loan book declined 7% QoQ, affected by the (a) lockdown, and (b) banks cautious approach in a weak macro environment. SA deposits growth was steady, driving further improvement in CASA mix to 56.7%. We have cut our PAT estimate for FY21/22E by 10%/11%, primarily to factor in higher credit cost, lower growth and other income. Maintain KMB reported 9% YoY decline in 1QFY21 standalone PAT to INR12.4b (6% below our estimates), affected by higher decline in other income and elevated provisions toward COVID-19 of INR6.2b. KMB, thus, has total COVID-19 provisions of INR12.
The cost-to-income rate has further improved to 46.02% in Q4FY2020 from 49.95% in the previous quarter and 47.15% in the corresponding quarter last year. However, the credit cost (NPA provisions as an annualized percentage of loans) jumped to 0.68% in Q4FY2020 from 0.47% in Q4FY2019 due to COVID 19 related provisions of Rs 660 crore. Further, the bank exhibited some moderation in loan growth to 7% at end March 2020. The business growth of the bank also eased to 12% at end March 2020....
Sharpening digital focus and liabilities amid credit slowdown Kotak Mahindra Bank (KMB) reported robust operational performance despite rapid deceleration in loan book growth (6.8% YoY, 1.4% QoQ). NII was Rs35.6bn (2% below our estimate), growing 16.8% YoY/3.8% QoQ. NII growth was driven by 26bps YoY/3bps QoQ expansion in reported NIM, which came on the back of rationalization of liabilities cost. Note that the bank has been strategically reducing deposit rates. Over the last 12 months, the bank has reduced its SA rate from 5.66% in 4QFY19 to 5.23% in 4QFY20. Consequently, overall cost of funds has declined by nearly 80bps since 4QFY19 to 4.6% in 4QFY20. What we find even more commendable is that the...
Post Covid resilience expected to be better than peers Healthy asset allocation, gaining momentum in market share provide relief in tough times. KMB maintains cautious stance in lending to companies with high cost and high leverage. Risk of exposure towards MSME is curtailed by government efforts. KMB would consider further SME/MSME lending given government's 100% credit guarantee support. Also, tight cost control measures by it including salary cuts by top management would also fuel...
While KMB's PPoP growth was healthy at 19% YoY led by stable NIM and healthy sequential growth in other income, PAT was impacted by Rs6.5bn of COVID related provisions. Higher CASA ratio and decline in SA deposit rates resulted in ~45 bps QoQ decline in CoF, aiding NIM of 4.7% despite a 700 bps decline in Loan-deposit ratio. We continue to like KMB for its strong liability franchise with improving CoF, conservative lending approach, strong subsidiaries, and healthy capital position. Despite lowering growth estimates and doubling of...
KMB's s'lone earnings of Rs12.6bn (PLe: Rs13.2 bn) stood lower on back of higher provisions both on overdue loans opting moratorium and enhancing PCR towards 70%, where other large peer banks are standing at. Loan growth remained challenging at 6-7% with conservative lending amongst segments, although deposit franchise continued to show a traction with strong SA inflow. Bank has used this opportunity to cut SA rates and benefit itself from lower deposits costs with further cuts in Apr'20 to bridge the gap on cost of funds with peers, thus helping NIMs move higher to 4.72%. Management...
13 May 2020 Loan growth remains muted as KMB continues to be cautious in a weak macro environment, further aggravated by the COVID-19 crisis. On the other hand, deposit growth remains strong, with the CASA ratio scaling new heights. Moreover, the standstill benefit enabled 90dpd loans worth INR6.6b to continue as standard. Overall, operating performance stood healthy, with PPOP growing at 19% YoY, although provisions for COVID-19 affected earnings. We cut our PAT estimate for FY21/22 by 14%/8%, primarily as we factor in higher credit cost. Maintain KMB reported 10% YoY decline in 4QFY20 standalone PAT at INR12.67b, affected by higher provisions toward COVID-19 of INR6.5b @ 10% of overdue loans, against which the standstill benefit is availed. NII grew at ~17% YoY to INR35.6b, supported by stable margins at 4.72% (26bp YoY increase). Opex growth stood at 14% YoY (~2% QoQ decline) to INR23.2b.
Further, the bank has informed that the Board of Directors have resolved to withdraw their writ petition in the Bombay High Court. In our view, an agreement among regulator and promoter of the bank will put an end to the overhang on the stock. This brings big relief from the bank's perspective as a reduction in stake from 29.96% is moderated to 26% with a new time frame of six months after approval of regulator. Further, time bound overhang on reduction of stake to 15% has been done away. In...
KMB has received in-principle approval from RBI to cap its promoters' voting rights in the bank from ~30% currently to 20% of paid-up voting equity share capital (PUVESC) until Mar'20, and thereafter reduce this to 15%.
Bank's CASA ratio increased 300bps YoY to 53.7%, driven by strong growth in average CA and SA deposits of 19.6% and 15.9% respectively. GNPA ratio up 44bps YoY due to slippages in few corporate accounts. We retain our HOLD rating on the stock and value the bank at 3.6x FY22E...
KMB's strong fundamentals (CRAR, liability franchise, minimal reported stress) should enable the bank to deliver an improvement in already strong return ratios. We do not find the current slowdown in growth and uptick in stress worrisome. Our NEUTRAL stance reflects discomfort on rich valuations. The contentious issue of promoter holding remains unresolved, and the next hearing is slated in Mar-20. KMBs earnings were slightly below estimates as opex (led by a one-off) and provisions came in higher. GNPAs continued to rise, though not alarmingly. Maintain NEUTRAL with a TP of Rs 1,681 (4.25x Dec-21E core ABV of Rs 309 + Rs 367 for subs), as valuations are expensive.
Kotak Mahindra Bank (KMB) reported 3QFY20 results with the key takeaways being: (1) Weak credit growth amid overall economic slowdown; we cut estimates (2) NIM expansion of 8bps qoq due to lower CoF; liability profile enviable (3) 14bps uptick in GNPAs partly a function of slower credit growth (See comprehensive conference call takeaways on page 2 for significant incremental colour.) Per se, on the key P&L; Items, KMB posted NII growth of 17% YoY at Rs34,295mn, PPOP growth of 23% YoY at Rs23,881mn and PAT growth of 24% YoY at Rs15,959mn. We have revised our estimates for FY20/FY21/FY22 and have retained an Accumulate rating on KMB with a revised target price of Rs1,757 (from Rs1,781 earlier), valuing...
