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 April 29, 2023.

Broker Research

May 03, 2023 / 12:58 IST

Buy

26 Aug, 2025 12:21

Volume

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Sharekhan's research report on Kotak Mahindra Bank

Kotak Mahindra Bank (KMB) reported a strong beat in earnings with standalone PAT up 26% y-o-y/25% q-o-q, led by robust operating profit growth (up 39% y-o-y/21% q-o-q) and lower provisions, translating into ROA of 3%. Margins continued to scale new highs at 5.75% (up 28bps q-o-q) in Q4FY2023 and 5.33% for FY2023. The bank is guiding for lower margins compared to FY2023 but is confident on sustaining margins above 5% in FY2024. Credit cost reported at 24bps (annualised) vs. 27bps q-o-q. Overall asset-quality outlook continues to remain stable to positive, thus benign credit cost environment is expected to continue in FY2024. Deposit growth outpaced loan growth sequentially. Traction in deposits was led by term deposits; but on the positive side, CASA growth picked up sequentially, led by CA balances. Near-term focus would be on the transition of MD and CEO post. The bank is expected to apply sooner with the RBI.

Outlook

We maintain our Buy rating with an unchanged SOTP-based PT of Rs. 2,250. The stock currently trades at 3.1x/2.7x its FY2024E/FY2025E core BV estimates.

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