Although some analysts have lowered their stock targets, allocating lower prices to book multiples, their price targets point to a possible return of up to 23 percent over the next 12 months over Wednesday’s close of Rs 1,776.65.
“Kotak returned a healthy core operating result and broad lending growth. NIM rose even further in a row and is on the higher end in recent years. The bank continues to show steady progress in building a strong guarantee, with a CASA ratio of 61 percent, the highest in the industry. “It is well positioned in a growing price environment and will enable it to grow competitively in its chosen business segment,” said Motilal Oswal Securities.
The Bank reported a 65 percent year-on-year increase (YoY) in independent earnings of 2,767 million rupees in the March quarter to an 18 percent increase in net interest income (NII) to 4,521 million rupees. The net interest rate differential (NIM) in the quarter was 4.78 percentage points compared to 4.39 percentage points in the quarter last year.
Management said there could be a 10-15 basis point contraction in NIM, presumably from a higher quarterly level of 4.78 percent. It also stated that 4.78 percent was an “unusual” margin and a margin of 4.3-4.6 percent would be considered healthy.
YES Securities said there are many factors that support NIM Kotak, including the fact that Kotak could boost growth in savings accounts (SA).
“In addition, unsecured retailers are a small part of the total loan book and its share should increase. The fixed-rate loan book is also a relatively small part of the total loan book. At the same time, despite lending growth of 21 per cent between years, the equity ratio has risen. sees this as an opportunity to increase market share, at the same time as it accompanies risk-adjusted pricing, “said the bank. This mediation is based on 2,023 rupees.
Nirmal Bang Institutional Equities, which measures 2,134 rupees on equities, said that while it may seem that a record margin has been behind the peak of the deposit ratio, the bank still sits at an average liquidity ratio of 130 cents.
“Furthermore, there is good scope for increasing unsecured exposures with high margins. Economic growth (YoY) indicates strong customer purchases (almost doubled in Q4). Mortgages and unsecured consumer loans picked up sharply. Asset quality continued to improve with loan losses. “At the same time as NPA rates are falling further, QoQ. SMA figures appear to be under control, indicating a positive outlook for asset quality,” it said.
Motilal Oswal sees the bank return CAGR’s 15 percent profit over FY22-24. It has maintained a “neutral” rating with a target of Rs 2,000 per share.
Meanwhile, Kotak Mahindra Bank has rejected its board as Gaurang Shah (ED) was removed from the bank and promoted to chairman of Kotak General Insurance. KVS Manian (60 years old) has been re-appointed as ED, while consumer bank manager Shanti Ekambaram (59 years old) has been promoted as ED.
This: We consider indications of a possible change in senior management, including Uday Kotak, CEO and CEO, and DMD Dipak Gupta in December 2023, “said Emkay Global.
“We are revising our FY23 performance plan by 4 per cent, but mostly keeping to the FY24 plan. We expect the bank to return a 2-2.1 per cent return, while the return on investment would remain moderate or 13-14 per cent due to increased equity. higher CoE and a modest sustainable return of 14 percent, we lower our target to Rs2,180 against Rs2,300 compared to an independent P / ABV which is 3.5 times compared to the previous 4 times, “he said.
Edelweiss has also lowered its target to Rs 2,120 from Rs 2,540, even as it raised EPS by 7 percent for FY23E; apartment for FY24E. It reiterated its “BUY” after Kotak’s best-in-class performance in the fourth quarter, and solid asset quality and LCR, “which make it well-positioned for a rising exchange rate.”
Nirmal Bang said that although management had sounded positive about lending growth, calibrated deposit growth was a key factor to monitor, as well as the bank’s approach to its pricing policy.
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