ICICI Direct's research report on Kotak Mahindra Bank
Kotak Mahindra Bank reported a good set of numbers on the operating front with profitability getting a boost from healthy margins, controlled cost and lower provisions. Though loan book growth remained flat sequentially, the management has indicated there would be a strategic shift in focus from maintaining strong liability franchisee to developing an asset base coupled with customer acquisition and engagement as well. On the asset quality front, performance was satisfactory with GNPA, NNPA ratio declining 15 bps, 23 bps QoQ to 2.55%, 0.64%, respectively. On a standstill asset qualification basis, asset quality remained stable with proforma GNPA at 2.70%.
Hence, premium valuations for management strength, sustainability. We maintain BUY rating with SOTP target price of Rs 1634, valuing at 3.9x FY22E.
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