Buy Kotak Mahindra Bank target of Rs 2250: Sharekhan

Sharekhan is bullish on Kotak Mahindra Bank has recommended buy rating on the stock with a target price of Rs 2250 in its research report dated January 21, 2023.

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January 23, 2023 / 20:52 IST

26 Aug, 2025 12:21

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Sharekhan's research report on Kotak Mahindra Bank

Kotak Mahindra Bank (KMB) reported strong earnings, with standalone PAT up 31% y-o-y/8% q-o-q, led by strong operating profit growth (up 43% y-o-y/8% q-o-q) and lower provisions. However, the bank reversed Rs. 38 crore of contingent provisions. Loan growth remained healthy (up 23% y-o-y/6% q-o-q) with a 30bps q-o-q margin expansion to 5.47%. Traction in deposits (up 13% y-o-y/6% q-o-q) picked up, led by strong growth in term deposits (32% y-o-y/13% q-o-q). CASA growth was flat y-o-y/q-o-q. CASA ratio moderated to 53.3% vs. 56.2% in the last quarter. Slippages moderated down by 24% q-o-q at Rs. 748 crore, of which Rs. 171 crore got upgraded in Q3FY2023 itself. Coupled with healthy recoveries and upgrades, asset quality improved with GNPA and NNPA ratios declining by 18 bps and 12 bps q-o--q to 1.90% and 0.43%, respectively. Net slippages were negative. SMA 2 book stood at Rs. 191 crore versus Rs. 119 crore q-o-q. Restructured book stood at 0.25% of advances vs. 0.34% q-o-q.

Outlook

We remain positive on the bank, while near-term focus would be on transition of Mr. Uday Kotak (MD and CEO) who would retire in December 2023. We maintain our Buy rating with an unchanged SOTP-based PT of Rs. 2,250. The stock currently trades at 2.8x/2.4x/2.1x its FY2023E/FY2024E/FY2025E core BV estimates.

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