Hold Kotak Mahindra Bank; target of Rs 1800: ICICI Securities

ICICI Securities research report on Kotak Mahindra Bank

Kotak Mahindra Bank (KMB) has reported a mixed set of Q2FY24 result with strong growth, but steep decline in NIM. More importantly, RBI has approved the candidature of Mr Ashok Vaswani (ex-Barclays / Citigroup) as MD & CEO of the bank for three years. Appointment of Mr Vaswani brings clarity on management succession. However, appointment of an external candidate appears to be in contrast to street expectations. This may also mean management transition and cultural acclimatisation could be a long-drawn process, in our view.

Outlook

While the current valuations are in-expensive in comparison to historical mean, the stock is likely to remain sideways till investors get comfortable with the new MD & CEO’s broad vision and strategy. Maintain HOLD with revised TP of INR 1,800 (vs INR 1,850 earlier).