Kotak Mahindra Bank Ltd. share price target

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...

Kotak Mahindra Bank (KMB) has reported a healthy of 9.6% qoq growth in PAT led by strong growth in core operating income coupled with lower operating and provision expenses. Notably, the quarterly and annual results are not comparable with those of corresponding period of FY15, as the reported results include operations of ING Vysya Bank (IVB) the merger of which was effective from April 01, 2015. Nevertheless, KMB's asset quality has shown signs of stabilization as GNPA ratio remained at 2.36% v/s 2.30% in 3QFY16. Overall, merger process is on schedule, and KMB's Management expects to finish entire merger process by...

Valuations are expectedly high at 3.6x standalone FY18E ABV, adjusted for subs at 20% holdco discount. Our SoTP of Rs 747 assigns 4.0x to standalone FY18E ABV and lower multiples of 3.5/2.5x to the auto-finance/LAS verticals. We initiate coverage with a BUY. To us, KMB represents a high-quality and broad-based play on Indian financial services, not just banks.

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...

Background: Kotak Mahindra Bank is one of the leading Private Sector Banks with a strong presence in Capital market related segments. Kotak Mahindra 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...

Over the last few years, Kotak Mahindra Bank has proven undoubtedly its competitive edge over the other private banks through higher fee income generation capability, well managed 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. 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 Rs706 (wherein the merged entity has been valued at 4x FY17E adjusted BV and...

Integration In full swing, within FY16 It's in full swing (1st Apr15): Treasury done (Day 1), Wholesale - done (Mid-May), and retail - before year-end. There's a dedicated team (30+, rest biz focused) making good progress: Technology-decided (KMB's...

Background: Kotak Mahindra Bank is one of the leading Private Sector Banks with a strong presence in Capital market related segments. Kotak Mahindra 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...

Buy on dips to Rs. 1209 - Rs 1249 for Target Rs. 1450 in 1 quarter