Motilal Oswal's research report on Kotak Mahindra Bank
KMB reported a strong 4QFY22, with a 64% YoY growth in standalone PAT to INR27.7b. This was driven by provision write-back in 4QFY22 as PPOP growth stood at 13% YoY. Healthy loan growth and improving margin supported traction in PPOP. Consolidated PAT stood at INR39b, up 50% YoY. Loan book grew 7% QoQ and 21% YoY to INR2.7t, led by sustained momentum across Home loans and the LAP business (+39% QoQ), while the Unsecured book (PL, BL, Consumer Durables, and Credit Cards) grew 42% YoY. This is a reflection of the huge opportunity in this segment and its comfort in growing the portfolio within the guardrails of risk applied by the bank. CASA mix improved by 80bp QoQ to 60.7%. -Asset quality improved, with fresh slippages declining to INR7.4b (similar to 3QFY22), while healthy recoveries and upgrades enabled a 37bp/15bp QoQ decline in the GNPA/NNPA ratio. KMB reversed INR4.53b of COVID-related provisions and it now has outstanding COVID-related provisions to the tune of INR5.5b (0.2% of loans).
Outlook
We maintain our Neutral rating. We maintain our Neutral rating with a TP of INR2,000/share (3.1x FY24E ABV + INR587 for its subsidiaries).
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