Hold Kotak Mahindra Bank; target of Rs 1850: ICICI Securities

ICICI Securities research report on Kotak Mahindra Bank

As per the meeting held on 2nd Sep’23, the board of Kotak Mahindra Bank (KMB) has informed that Mr. Uday Kotak has resigned as the MD & CEO of the bank and has become a non-executive non-independent director of the bank for a period of 5 years. He would not be liable to retire by rotation. Mr. Dipak Gupta (joint MD) would carry out MD & CEO responsibilities in the interim, subject to regulatory and other approvals. The key monitorable for the stock would be the candidature and transition of the new MD & CEO.

Outlook

We maintain HOLD on KMB with a revised target price of INR 1,850 (earlier: INR 2,000) valuing the stock at ~2.6x FY25E core banking book (earlier: ~2.8x). Upside risk is in growth exceeding expectations and downside risk is in less than smooth management transition.