Buy Kotak Mahindra Bank; target of Rs 2130: Sharekhan

Sharekhan is bullish on Kotak Mahindra Bank has recommended buy rating on the stock with a target price of Rs 2130 in its research report dated January 25, 2021.

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February 01, 2021 / 06:39 PM IST

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Sharekhan's research report on Kotak Mahindra Bank

Kotak Mahindra Bank’s (KMB) Q3FY2021 numbers were healthy, with strong operational numbers, improved asset quality (on a sequential basis), healthy CASA, and advances traction, which were positives. The bank’s gross NPA ratio and net NPA ratio (proforma basis) would have been 3.27% and 1.24%, respectively (was 2.7% and 0.7% in Q2FY2021); but proactive front-loading of provisions with restructured assets at 0.28% indicate stable asset-quality outlook. The bank’s management commentary is more positive on growth, also seen in strong sequential growth in advances, which is encouraging.

Outlook

We value the standalone bank at ~4.5x its FY2023E book value and its subsidiaries at ~Rs. 490 per share. We recommend a Buy on KMB with an SOTP-based price target (PT) of Rs. 2,130.

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