Prabhudas Lilladher has given Accumulate recommendation for Kotak Mahindra Bank with a target price of Rs. 1978 in its research report issued on Jan 30, 2022
Prabhudas Lilladher’s research report on Kotak Mahindra Bank
KMB’s Q3 earnings of Rs21.31bn (PLe: R20.46bn) were marginally higher along with decent NII growth of 12% YoY & provision write back, while other income saw a minor blip due to MTM Provisioning on investment and higher other opex growth. Tailwinds from lower cost of funds continue, while loan growth returned at 18% YoY. Slippages continued to come off and stood at 1.2% of loans, other metrics like PCR continues to be robust at 71%, retained COVID provisions of ~40bps and restructuring of 54 bps. We believe KMB has emanated from cycle of stress and now remains focused on asset side growth driven by 1) higher customer acquisitions & experiences, 2) comfort on growing unsecured retail, 3) well managed asset quality and 4) commitment towards high technology investments. The business momentum should continue with control on credit costs/ slippages and higher share of low cost deposits, though high opex could be a hindrance in earnings growth.
We retain ‘ACCUMULATE’ with TP of Rs1,978 (unchanged) & subs value of Rs430 based on Sep-23 SOTP.
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At 16:00 hrs Kotak Mahindra Bank was quoting at Rs 1,942.30, up Rs 56.75, or 3.01 percent.
It has touched an intraday high of Rs 1,947.80 and an intraday low of Rs 1,898.95.
It was trading with volumes of 121,848 shares, compared to its thirty day average of 109,924 shares, an increase of 10.85 percent.
In the previous trading session, the share closed up 1.51 percent or Rs 28.05 at Rs 1,885.55.
The share touched its 52-week high Rs 2,252.45 and 52-week low Rs 1,627.25 on 27 October, 2021 and 30 July, 2021, respectively.
Currently, it is trading 13.77 percent below its 52-week high and 19.36 percent above its 52-week low.
Market capitalisation stands at Rs 385,332.89 crore.