Hold Kotak Mahindra Bank; target of Rs 1,730: ICICI Securities

ICICI Securities recommended hold rating on Jubilant Foodworks with a target price of Rs 1,730 in its research report dated July 22, 2024.

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July 23, 2024 / 12:41 IST

hold

26 Aug, 2025 12:21

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ICICI Securitie's research report on Kotak Mahindra Bank

Net advances growth was healthy at 4% QoQ and 19% YoY. Sequential growth was driven by corporate (up 7%), while consumer and commercial grew 3% and 1% QoQ, respectively. Within consumer, home loan and business banking grew 4% QoQ each, while credit card, personal loans growth was tepid at 1% QoQ. Share of unsecured retail advances (including retail microfinance) declined to 11.6% vs 11.8% QoQ. Unsecured retail advances growth has been partly impacted by RBI embargo. However, there is no change in management’s medium-term guidance of increasing the share to mid-teens. We continue to estimate slight moderation in loan growth to 16% YoY on continued soft trend in unsecured retail and volatile growth trends in corporate segment (key driver of Q1FY25 growth).

Outlook

Kotak Mahindra Bank (KMB) has reported Q1FY25 PAT of INR 62.5bn. Adjusted for stake sale of general insurance business, PAT of INR 352bn was in line with our estimates but lower than consensus estimates. Loan growth was steady at 4% QoQ (up 19% YoY), though was driven by corporate loans (up 7% QoQ). Deposits growth on both YoY and QoQ basis has moderated significantly. CASA share has fallen to multi-quarter low of 43.4%. Retail unsecured loans growth has been impacted by RBI ban and growth in the next couple of quarters is likely to be soft, in our view. Slippages were flattish, though credit cost inched up. We continue to see pressure on loan growth and NIM YoY and see muted core operating earnings growth ahead. Our PAT / subs value estimates have been revised upwards as we incorporate sale / residual stake of general insurance business. Maintain HOLD.

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