Sharekhan's research repor on Kotak Mahindra Bank
Kotak Mahindra Bank (KMB) Q2FY21 numbers were strong with operational numbers beating expectations, stable asset quality (on a proforma basis) which were positives. Even on a proforma basis, GNPA would have been 2.70% and NNPA would have been at 0.74%; stable from Q1 levels), indicating better outlook. Management indicated a shift of gears, to have higher focus on advances growth; with improving outlook (collection efficiency (for September at ~95%) is positive. We value standalone bank at ~3.9x its FY2023E book value and its subsidiaries at ~Rs. 360 per share.
Outlook
We recommend a Buy on KMB with an SOTP based price target (PT) of Rs 1730.
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