Buy Kotak Mahindra Bank; target of Rs 2230 Prabhudas Lilladher

Prabhudas Lilladher is bullish on Kotak Mahindra Bank has recommended buy rating on the stock with a target price of Rs 2230 in its research report dated October 20, 2024.

Broker Research

October 21, 2024 / 15:03 IST

Buy

26 Aug, 2025 12:21

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Prabhudas Lilladher's research report on Kotak Mahindra Bank

KMB saw a soft quarter owing to miss on loan growth and asset quality. Due to full impact of the RBI embargo, credit flow was weak led by slower offtake in unsecured, while corporate saw muted growth due to irrational pricing. Weak credit flow in H1FY25 would be partly offset by purchase of Standard Chartered Bank's (SCB) PL portfolio (Rs41bn). Hence, we cut loan growth for FY25/26E by 2%/1%. We have factored in declining margins due to likely repo rate cut and slower unsecured growth, but raise NIM for FY25/26E by 3/6bps on account of (1) SA rate cut in the <Rs0.5mn bucket and (2) acquisition of SCB’s PL book. This would be offset by rise in provisions for FY25/26E by 7/6bps as stress in unsecured (incl. MFI) is likely to continue for the next few quarters.

Outlook

The stock trading at 1.9x on Sep’26 ABV. We maintain multiple at 2.4x but raise TP to Rs2,230 from Rs2,125 as we roll forward to Sep’26 core ABV. Retain ‘BUY’.

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