Kotak Mahindra Bank Q1 Results Review - Steady Quarter With Robust Growth Metrics: Dolat Capital

Dolat Capital Report

Kotak Mahindra Bank Ltd. reported a healthy quarter with net interest margin at 5.02% (-20 basis points QoQ ex of one-offs), robust loan growth at 4% QoQ, and one-time gains from stake sale in KGI aiding return on asset of 3.9%. Excluding one-time gain, PAT would be higher by 7% versus our estimates.

Growth in retail unsecured book was muted at 2% QoQ, impacted by RBI order. The bank continues to aspire for unsecured share at mid-teens (11.6% currently), though growth may be slower in the interim.

Management alluded to some stress in low-ticket credit card loans, mainly where customers are overleveraged. Potential financial impact from RBI action continues to be in-line with the initial estimate.

Factoring in one-time exceptional gain from stake sale in KGI, FY25E earnings have been revised upwards by 20%. Maintain ‘Buy’ rating with revised target price of Rs 2230 (from Rs 2100 earlier) valuing the standalone bank at 2.6 times FY26E adjusted book value (3.5 times including subs).

Click on the attachment to read the full report:

DISCLAIMER

This report is authored by an external party. NDTV Profit does not vouch for the accuracy of its contents nor is responsible for them in any way. The contents of this section do not constitute investment advice. For that you must always consult an expert based on your individual needs. The views expressed in the report are that of the author entity and do not represent the views of NDTV Profit.

Users have no license to copy, modify, or distribute the content without permission of the Original Owner.