Kotak Mahindra Bank Ltd. share price target

Maintain BUY with a SOTP of Rs 1,212 (4.5x Dec-19 core ABV of Rs 226 + sub value of Rs 193). KMBs stellar show continued with (1) Sustained growth momentum (+20% for 2nd consecutive qtr), (2) Creditable SA accretion (+54% YoY) on a higher base, (3) Further improvement in asset quality coupled with a jump in PCR and (4) increasing oplev. While NIM dipped sequentially, it remains healthy at 4.2%. Subsidiaries contribution to the profitability pie increased (35% of consol PAT) largely driven by a flourishing equity market related subs.

KMBs Q2FY18 PAT grew 22% YoY to Rs 9.9 bn on lower-than-expected operating expenses and provisions. Key highlights of the result: loan growth at 21% YoY continued to gain momentum, while CASA ratio increased by ~400 bps QoQ to 47.8%.

Maintain BUY with a SOTP of Rs 1,179 (4.5x Sept-19 core ABV of Rs 220 + sub value of Rs 187) Clarity of mgt intent coupled with yet another strong show reaffirms our belief in KMBs growth story. Healthy NIMs (4.33%, despite relatively higher SA rates), strong loan growth (+21%), fee traction (+29%), controlled opex (flat QoQ) and stable asset quality, with a miniscule exposure to stressed/IBC a/cs, led to 22% growth in net earnings.

ICICI Securities Ltd | Retail Equity Research Kotak Mahindra Bank (KMB) reported a steady set of numbers. NII came in at | 2313 crore, up 15.9%, attributable to credit offtake of 21% YoY despite ~14 bps QoQ decline in margins Healthy growth in other income at 14.7% YoY to | 953.8 crore; a bit lower than previous quarter run rate due to lower treasury gains at | Provision came in as expected at | 216.5 crore while credit cost came in at ~56 bps, in line with management guidance of 50-60 bps....

Kotak Mahindra Bank Ltd.'s quarterly earnings met estimates, and asset quality remained stable. On the consolidated front, the bank has reported 20% growth in the net profit at Rs 1440.68 crore, with the NII rising 16% to Rs 3085.26 crore in the quarter ended September 2017. Non-interest income rose 7% to Rs 3074.18 crore and Net Total Income moved up 11% to Rs 6159.44 crore in the quarter ended September 2017. The expense ratio...

Performance Continues to be Stable; Maintain BUY Kotak Mahindra Bank (KMB) has reported a healthy performance in 2QFY18 as both standalone and consolidated net profit recorded a healthy growth. Its standalone PAT grew by 22.3% YoY and 8.9% QoQ to Rs9.9bn on the back of healthy growth in customer assets (+20.7% YoY & +6.1% QoQ), best-in-class NIMs (4.3%) and strong growth in core fee income (+28.6% YoY & +0.6% QoQ). Further, the Bank's consolidated PAT surged by 20% YoY and 7% QoQ to Rs14.4bn backed by strong bottom line growth recorded by Kotak Prime (+15.4% YoY & 13.6% QoQ to Rs1.5bn), Kotak Life (+57.7% YoY and -2.9% QoQ to Rs1bn) and Kotak Securities (+22.9% YoY...

Kotak's consolidated profits for 2QFY18 were up 20% YoY and were in-line with our estimates. Growth in customer assets, which had picked up in the previous quarter, sustained in 2QFY18 with 21% YoY growth (22% YoY in consolidated loan book) and management commentary on growth outlook remains confident. Key positives during the quarter were a) significant decline in cost-to-income ratio (down ~200bps YoY) despite additional expenditure pertaining to 811' and priority sector certificates, b) Strong SA growth of +61% YoY driven by government business, and c) management disclosure that Post-IFRS networth of the bank will be higher than under the current accounting methodology. Subsidiaries, too,...

Loan growth gained momentum, coming in at 21% YoY (+7% QoQ), led by strong traction in CV, small business and personal banking segments. Deposit growth stood at 17% YoY/1% QoQ. Other highlights: a) CASA growth remained strong at 44% YoY (62% YoY growth in SA deposits). CASA ratio thus increased 390bp QoQ to 47.8%. b) SMA2 advances declined to 16bp of loans v/s 21bp in 1QFY18, while OSRL declined to INR650m (4bp of loans). Other businesses: a) Profitability in the securities business improved to...

Kotak Mahindra Bank (KMB) reported a strong Q1FY18 with 23% YoY growth in PAT to Rs 9.1 bn on lower-than-expected other income and provisions. The key highlight of the result was that loan growth at 18% YoY continued to gain momentum. The management continues to guide for a loan growth of 20% and ex..

Background: Kotak Mahindra Bank is one of the leading mature private sector bank having business interests across most financial services products. The bank started business in the mid-1980s as a bill discounting company. Since then, it has entered various financial services businesses, such as securities, investment banking, life insurance, asset management, and banking, and it has become one of the leading players in capital markets in India. Kotak obtained its banking license in 2002. It has...