Kotak Mahindra Bank Ltd. share price target

ICICI Securities Ltd | Retail Equity Research Net interest income (NII) came in at | 2050 crore, up 16.1% YoY, broadly in line with our estimate. Healthy growth in NII is attributable to credit offtake of 12.1% YoY coupled with ~19 bps YoY improvement in margins at 4.49% Provision came at | 192 crore, in line with our estimate of | 197 crore. Credit cost came in at 15 bps (16 bps in Q2FY17). On asset quality front, QoQ net GNPA declined by | 3 crore (| 122 crore in...

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 next few quarters' post completion of merger of IVB. We continue to assign HOLD recommendation on the stock with an upward revised Target Price of Rs810 (valuing the merged entity at...

ICICI Securities Ltd | Retail Equity Research Provisions came in higher at 12% YoY to | 197.7 crore with credit cost at 16 bps. On the asset quality front, net QoQ GNPA addition declined at | 122 crore vs. | 221 crore in Q1FY17 with absolute GNPA at | 3181 crore and GNPA ratio at 2.49% (decline 1 bps QoQ). Restructured assets also declined | 147 crore vs. | 160 crore in Q1FY17, forming ~0.12% of its loan book Net interest income (NII) came in at | 1995 crore, up 18.9% YoY,...

KMBs 2Q performance was broadly commendable. Sequential stability in the business banking (SME) book implies that integration challenges are mostly overcome, a vital trigger for growth hereon.

Kotak Mahindra Bank Ltd. (KMBL) is India's fourth largest private sector Bank with a pan India presence. It offers a wide range of banking products and financial services for corporate and retail customers through a variety of delivery channels and specialized subsidiaries in the areas of personal finance, investment banking, life insurance and wealth management etc. As on June 30, 2016, it has a national footprint of 1333 branches spread across 674 locations and 2034 ATMs, affording it the capacity and means...

Kotak Mahindra Bank (KMB) delivered a stable quarter, commendable given the integration with e-VYSB. With integration almost done (~90%), focus will shift to growth (and operating leverage).

ICICI Securities Ltd | Retail Equity Research Provision declined QoQ at | 180 crore compared to | 200 crore in Q4FY16. On asset quality front, net QoQ GNPA addition increased at | 221 crore (|148 crore QoQ) with GNPA at | 3059 crore and GNPA ratio at 2.5% (increase of 14 bps QoQ); owing to slippages from SME exposure. With recovery restructured asset declined at |160 crore vs |305 crore in Q4FY16, forming ~0.13% of its loan book Net Interest Income (NII) came in at | 1919 crore; up 20.1% YoY,...

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...

In-line, healthy lending business performance; stable asset quality KMB's standalone results: PAT grew 3x YoY to INR7.4b (in line with estimates). Strong core operating performance (+26% YoY), healthy NII growth (20% YoY) on the back of margin improvement (4.4%), controlled opex growth (adjusted +12% YoY), and stable asset quality (NSL at 1.3%) were the key highlights. Moderate...

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...