Prabhudas Lilladher recommended accumulate rating on Kotak Mahindra Bank with a target price of Rs 1239 in its research report dated April 30, 2018.
Prabhudas Lilladher's research report on Kotak Mahindra Bank
KMB's s'lone earnings were slightly lower than expectations at Rs11.2bn (PLe: Rs12.0bn) on back of higher provisions (non NPA related) and hit on opex from change in gratuity assumptions. Loan growth momentum of 25% YoY was a positive surprise, while accretion in CASA also has been phenomenal. Subsidiaries especially the financial savings business continues to see good growth & profitability, while the capital market businesses were slightly slower this quarter. Management expects loan growth of 20% with steady growth in corporate, CV/CEs and retail segments and continue its traction on CASA mainly driven from its digital drive.
Outlook
We retain "Accumulate" with revised TP of Rs1,239 (up from Rs1,165) based on Mar-20 SOTP with lending biz valued at 3.5x ABV.
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