Kotak Mahindra Bank Ltd. share price target

Kotak Mahindra Bank (KMB) reported tepid 4QFY21 results with the key pointers being: a) profitability (PAT declined 9.2% sequentially) dragged down because of higher provisioning b) GNPA/NNPA ratio of 3.25%/1.21% marginally higher than expected c) sequential credit growth...

Kotak Bank posted lower-than-expected NII growth at 8.0% YoY to | 3842 crore, mainly on account of 34 bps YoY and 19 bps QoQ decline in net interest margins. The bank took a hit of ~| 110 crore in NI line for relief on interest on interest. Non-interest income (NII) reported a sharp jump of 31% YoY, 51% QoQ to | 1949 crore, driven by 23% QoQ rise in fee income and treasury gains (PBT level) of | 898 crore vs. | 48 crore QoQ. Cost to income ratio declined ~258 bps YoY with 9.4% QoQ reduction in employee expenses due to lower retirement benefits due to improved interest rates....

Kotak Bank's (KMB) Q4FY21 PAT at Rs 16.8bn (+33% YoY) was largely in line with our estimates.

KMB reported a miss on our expectations as PAT stood at INR16.8b (14% below our estimate), affected by lower NII and higher provisions. Loan book grew 4.5% QoQ led by steady traction in Home loans, CV/CE, and the Agri...

Bank disbursed Rs. ~9,700cr under Emergency credit line guarantee scheme to date (~5.0-5.5% of the overall utilization of the scheme). In Q3FY21, NII rose by 16.2% YoY to Rs. 5,160cr and NIM stood at 4.58% owing to lower cost of funds this quarter. Collections for secured loans reached pre-COVID levels, while for unsecured it is nearing pre-COVID levels (improving on MoM basis). As the economic activities are coming back on track, Kotak Mahindra Bank should continue to perform well given its lower cost of funds,...

Stress is Showing Up, Valuations are Stretched Kotak Mahindra Bank, (KMB) reported NII growth of 17%/2.4% YoY/QoQ primarily driven by lower cost of funds aided by declining SA costs and higher liquidity available at bank due to recent capital infusion.

The cost-to-income rate rose to 42.27% in Q3FY2021 from 38.54% in the previous quarter, while declined from 49.95% in the corresponding quarter last year. The credit cost (NPA provisions as an annualized percentage of loans) rose to 1.20% in Q3FY2021 from 0.80% in Q3FY2020. The loan book of the bank declined 1% at end December 2020. The business growth of the bank rose to 5% at end December 2020. On consolidated front, the bank has reported 11% growth in the Net Profit to Rs 2601.67 crore...

We revise our rating to Hold from Buy with a revised target price of 1818 (SOTP basis).

Kotak Mahindra Bank reported a good set of numbers on the operating front with profitability aided by healthy margins and controlled cost. Sequential pick-up in loan book is a positive and was in line with the management's intent to pedal growth from here on. Headline GNPA and NNPA ratio declined from 2.55% and 0.64% to 2.26% and 0.50% QoQ, respectively. However, proforma based GNPA increased by 54 bps QoQ to 3.24%, while NNPA jumped 50 bps to 1.24%. Restructured book was at 0.28% of advances, still below earlier estimates. Going into next...

Kotak Mahindra Bank (KMB) reported tepid 3QFY21 results with the key pointers being: a) profitability (PAT declined 15.1% sequentially) dragged down because of higher provisioning b) Pro-forma NPA (GNPA/NNPA ratio of 3.27%/1.24%) marginally higher than expected c) sequential credit growth stood positive at 4.5% QoQ; with strong participation in ECLGS, d) sequentially higher cost to income ratio (42.3% v/s 38.5% in the previous quarter) driven by lower other income and higher opex., e) Higher provisioning expenses (6bn v/s 3.7bn in the previous quarter) led to sequential PAT de-growth; Covid provision stood 12.8bn as of 3QFY21, f) the total contingent provisioning (Covid + Standard + Specific) stood 1.08% of net advances, g) Total PCR (including Covid, general and specific provision) stood above...