Moneycontrol PRO
Upcoming Webinar:Watch a panel of experts discuss: Challenges of continuously evolving regulation for Cryptocurrency, on 7th July at 3pm. Register Now

Accumulate Kotak Mahindra Bank; target of Rs 1580: Dolat Capital Market

Dolat Capital Market recommended accumulate rating on Kotak Mahindra Bank with a target price of Rs 1580 in its research report dated October 26, 2020.

October 29, 2020 / 11:10 AM IST
  • bselive
  • nselive
Todays L/H

Dolat Capital Market's research report on Kotak Mahindra Bank

KMB reported NII, PPoP, and PAT growth of 17%, 31%, and 27% YoY respectively despite advances de-growth of 4% YoY, led by improvement in CoF, higher fee lines, elevated treasury gains and lower provisions. Including standstill NPAs, slippages would have been ~1.1% and gross NPA would be stable QoQ at 2.7%. PCR increased by ~700 bps QoQ to 76% and stood at ~72% on a pro forma basis, implying healthy recoveries and low write-offs during the quarter. Standard loan cover stood at 0.6% of advances as of Sep-end, same as last quarter. Management noted that the stock of provisions the bank held was adequate and conservative. Despite weak growth trends, continued moderation in CoF has aided NII growth. Growth should not be a challenge eventually, given the comfort on CoF. We expect incremental asset quality risks to be limited for KMB owing to its conservative stance on lending and strong risk practices.


However, trading at 4.1x 1 year forward ABV, valuations factor in most positives. Rolling over our estimates to Sep22E, we maintain our ACCUMULATE rating with a revised TP of Rs1,580 (from Rs1450 earlier) based on 3.3x Sep-22E ABV for the standalone bank and value of subsidiaries, implying a P/ABV of 4.5x.

For all recommendations report, click here


Disclaimer: The views and investment tips expressed by investment experts/broking houses/rating agencies on are their own, and not that of the website or its management. advises users to check with certified experts before taking any investment decisions.

Broker Research
first published: Oct 29, 2020 11:10 am
ISO 27001 - BSI Assurance Mark