Hold Kotak Mahindra Bank; target of Rs 2000: ICICI Securities

ICICI Securities recommended hold rating on Kotak Mahindra Bank with a target price of Rs 2000 in its research report dated July 24, 2023.

Broker Research

July 24, 2023 / 14:19 IST

hold

26 Aug, 2025 12:21

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ICICI Securities research report on Kotak Mahindra Bank

Kotak Mahindra Bank (KMB) reported healthy Q1FY24 PAT at INR 34.5bn (~5% beat, led by higher other income) with RoA at 2.8%. Deposit growth jumped sharply to 6% QoQ though entirely from term deposits (up 15% QoQ) while CASA declined. There was a substantial rise in slippages / credit costs, which was partly due to higher share of unsecured loans (now at 10.7% vs 7.9% YoY). For FY24E-FY25E, we maintain our loan growth estimates at ~18% CAGR and credit cost estimate at 50-60bps. However, we raise our FY24E/FY25E PAT by 2-3% on higher other income. We estimate ~2.2% / 1.9% RoAs for FY24E / FY25E respectively.

Outlook

Maintain HOLD with target price increased to INR 2,000 (vs INR 1,900) valuing the stock at ~2.9x FY25E core banking book (vs ~2.7x) and ~INR 500 per share (broadly unchanged) for subsidiaries. Upside risk is higher than expected growth and downside risk is sharp deterioration in asset quality.

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