Kotak Mahindra Bank Ltd. share price target

Kotak Mahindra Bank had issued 100 crore non-convertible perpetual noncumulative preference shares (PNCPS) of face value | 5 each aggregating to | 500 crore. It will be added to the paid up capital but not equity capital. Post the issue, the promoter stake, which was earlier at 30.03%, has declined to ~19.7%, adhering to RBI requirement on reducing shareholding under 20%. The RBI has been informed about the transaction while approval on the same is awaited. RBI had previously mandated the bank reduce promoter stake to 20% of paid up capital by December 2018 and 15% by March 2020. As per media reports, issued PNCPS will be listed on the stock exchange....

CASA ratio of KMB improved by 640bps to 50.3% against 43.9% YoY. GNPA/NNPA ratios improved to 1.93%/0.77% against 2.24%/1.07 % on YoY. Earnings are expected to sustain a healthy growth of 24% CAGR on the back of robust loan growth at 21% CAGR. With a stable earnings outlook, we value KMB at 3.9 x P/BV and increase...

Kotak Mahindra Bank (KMB), on a standalone basis, reported robust 15% growth in Net Profit to Rs Kotak Mahindra Bank (KMB), on a standalone basis, reported robust 12% growth in Net Profit to Rs 1024.94 crore in the quarter ended June 2018 (Q1FY2019) over the corresponding quarter of last year. The bank has exhibited healthy improvement in asset quality, while net interest margins (NIMs) remained strong in Q1FY2019. NIMs of the bank was nearly steady at 4.30% in Q1FY2019 compared with 4.35% in the previous quarter, while declined from 4.50%...

Maintain BUY with SOTP of Rs 1,378 (4.5x Mar-20 core ABV of Rs 238 + Rs 309 for subs). A one-time MTM hit (~Rs 2.1bn) and higher NPA provisioning (LLP +49% QoQ, PCR rose to 61%) capped KMBs net earnings (down 9% QoQ, missing estimates by ~7%). The business remains healthy as ever, with broad based loan growth (+24% YoY), best in class NIMs (4.30%) and negligible net stress incl. SMA-II (97bps, down 6bps).

20 July 2018 1QFY19 PAT grew ~12% YoY to INR10.2b 9% miss due to higher provisions (investment provisions of INR2.1b). However, operating profit grew 27.4% YoY to INR20.3b (6% beat), led by 15% YoY NII growth. Margins shrank 5bp QoQ to 4.3%, as incremental loan growth was led by corporate, while borrowings increased 70% YoY/33% QoQ. CASA deposits grew 33% YoY, led by 51% YoY growth in SA deposits (SA cost of 5.61%). CASA ratio declined 50bp QoQ to 50.3%. GNPLs increased by 1.9% QoQ, but management sounded cautious on the SME/business banking segment and cited risks from inflated collateral value that is being used by banks as a basis for extending loans. KMB made additional provisions (apart from investment provisions of INR2.

ICICI Securities Ltd | Retail Equity Research Kotak Mahindra Bank's operational performance continued to remain steady. However, higher provision impacted earnings growth. NII grew 15% YoY at | 2583 crore, led by healthy credit offtake at 24% YoY to | 176927 crore. NIM declined ~5 bps QoQ at 4.3% Aided by healthy growth in NII and non-interest income, profit prior to provision (PPP) came in at | 2032 crore. However, provision came in higher at | 470 crore, led by provision towards advances at | 260...

Lagged Expectation: The bank's standalone performance lagged expectations with slower than estimated momentum on loan growth, NIMs saw further pressure despite the bank conserving on capital, quarter end CASA growth hitting high base and core fee income growth lagging advance growth.

ff Its NIMs witnessed moderation due to slower transmission under MCLR regime. However, the Management believes the NIMs have bottomed out and may start improving, going forward. As CASA book constitutes ~50% of the Bank's deposits, and the Management...

Kotak Mahindra Bank (KMB), on a standalone basis, reported robust 15% growth in Net Profit to Rs 1124.05 crore in the quarter ended March 2018 (Q4FY2018) over the corresponding quarter of last year. The bank has exhibited healthy 19% growth in the net interest income, while core fee income surged 33% in Q4FY2018. Net interest margins (NIMs) has improved on sequential basis to 4.35% in Q4FY2018 compared with 4.20% in the previous quarter. The bank has also showed healthy improvement in asset quality in Q4FY2018. The cost-to-income rate has further improved to 45.92% in Q4FY2018 from 46.99% in the previous quarter and 46.21% in the corresponding quarter last year. Employee cost impacted...

ff KMB witnessed a robust performance in profitability in its financial services and life insurance business subsidiaries. Notably, the Bank owns 100% stake in these subsidiaries. For the first time, the Bank disclosed the Embedded Value of its life insurance business to Rs58.2bn; which is relatively higher than the street expectations. ff Credit costs including standard assets provisioning stood at 61bps in FY18 compared to 56bps in FY17. Additionally, the Management guided the credit cost to trend down further in FY19. With major contribution from Business Banking, SME and Retail segment, the Bank expects loan growth of over 20% in FY19....

Kotak Mahindra Bank (KMB) reported steady set of numbers. NII grew 19% YoY to |2579 crore, led by healthy credit offtake at 24.7% YoY to | 169718 crore. Margins improved QoQ to 4.35% from 4.2%. Healthy operational performance continued with PPP at | 2018 crore, up 18.6% YoY. Cost income ratio improved ~110 bps QoQ at 45.9%, despite one-time provision of ~82 crore related to change in gratuity ceiling. Credit cost remained lower, however, provision related to investment depreciation at ~| 132 crore (bank did not utilized...

Strong but valuations add to discomfort:The key highlight for the quarter is a sequential increase in margins consequent tophenomenal accretion in CASA and MCLR increase. All the other parameters remained encouraging: Loan and core fee income growth was strong, Asset quality was stable and Cost ratios continued to trend down.

Maintain BUY with SOTP of Rs 1,371 (4.5x Mar-20 core ABV of Rs 238 + Rs 302 for subs). Even as KMB reported an expectedly impressive 4QFY18, CASA accretion stood out (Rs 240bn over FY18, 2x FY17). Loan growth (+25% YoY) was at an 8-qtr high, with robust fee growth (+33% YoY) and uptick in NIM (4.35%, +15bps QoQ). Asset quality improved further (G/NNPAs down 9/11bps QoQ). Zero restructured loans and negligible SMA-II (4bps) capped a perfect show. Despite the investments in 811 (Rs 1.5bn), opex growth was restricted to 17%.

Asset quality held stable, with NNPL declining by 3.6% QoQ, even as GNPL increased by 3% QoQ. PCR improved by 300bp QoQ to 56.5%, led by significantly higher-than-expected provisioning. GNPL/NNPL ratios, thus, improved 9bp/11bp QoQ to 2.22%/0.98%. SMA-2 advances stood at 4bp of loans at INR720m lowest-ever level since KMB started reporting the same. Loans grew 24.7% YoY (+6.7% QoQ); deposits rose 22.4% YoY (+6.5% QoQ). Share of core deposits (CASA+ TD less than INR50m) was 77% v/s 75% QoQ. Subs performance robust: a) KMPL reported PAT of INR1.6b (+20% YoY),...

Kotak Mahindra Bank surpassed analysts estimates, by witnessing nearly 20% rise in it's standalone net profit during quarter ended December 31, 2017 (Q3FY18). The bank posted standalone net profit of Rs 1,053.21 crore in Q3FY18, rising by 19.71% from Rs 879.75 crore in the corresponding period of the previous year. Q3FY18 net profit was also up by 5.92% from Rs 994.31 crore in the preceding quarter. Standalone net interest income (NII) was at Rs 2,393.72 crore, registering growth of 16.74% from Rs 2,050.32 crore in Q3FY17 and by 3.50% from Rs 2,312.66 crore in Q2FY17. Provisions of Kotak were at Rs 212.77 crore, which rose by 10.76% from Rs 192.10 crore in...

KMB's Q3FY18 PAT at Rs 10.5 bn was lower than estimates on higher than expected operating expenses. Loan growth at 23% YoY continued to gain momentum and management believes +20% YoY growth is sustainable.

ICICI Securities Ltd | Retail Equity Research Kotak Mahindra Bank (KMB) reported steady set of numbers. NII grew 16.7% YoY to |2394 crore, led by healthy credit offtake at 23% YoY to |159071 crore. NIM declined 13 bps QoQ to 4.2%, but...

ff With the positive initial response to Digital 811 Account, KMB expects the traction to continue in FY19 as well. However, standalone opex was partially impacted due to higher promotional cost for same. The Management has clearly indicated that apart from organic growth, the...

Kotak Mahindra Bank Ltd Q3FY18 results comment NII grew to Rs. 3185.9 Cr in Q3FY18 compared to Rs. 3085.26 Cr in Q2FY18

Margin contracted another 13bp QoQ to 4.2%, while fee growth stood at a healthy 14% YoY. CASA deposits grew 34% YoY to INR843.9b, of which SA deposits grew 52% YoY (+9% QoQ). However, the CASA ratio declined 110bp QoQ (+470bp YoY) to 46.7%. Absolute GNPA declined 2.6% QoQ, while the GNPL ratio improved by 16bpQoQ to 2.31%. PCR (cal.) improved by 419bp QoQ to 53.9%. Restructured loans stood stable at INR670m (4bp), while SMA2 accounts increased to19bp of loans (INR3.08b) v/s 16bp in the previous quarter. Loans grew 23% YoY (+4% QoQ), while deposits increased 21% YoY (+9%QoQ). KMB guided for 20%+ loan growth, as it sees improving trends in the micro environment. Share of core deposits (CASA+less than INR50m retail TD) stood at 75% (77% in 2QFY18)