1
Please refer to important disclosures at the end of this report
1
1
Kotak Mahindra Bank (KMB) is one of the leading mature private sector bank
having business interests across most financial services products. Post receiving a
licence in 2002, grew to a loan book size of `136082cr in FY17.Retail loans
form ~50% of total loans, enabling KMB to earn the best NIM in the industry at
4.5-4.9% led by high yielding retail loans. NII has grown from `1858cr in FY10
to `8126cr by FY17, supported by strong credit and savings deposit growth. With
the ING Vysya Bank merger, composition of the loan portfolio has been altered
with retail advances proportion declining to ~41% from 50% earlier.
Demonetisation, in Q3FY17, further provided impetus to CASA growth, which
increased at `71768cr as of Q1FY18. CASA ratio improved from 28-29% in the
past to ~44%. With the integration of ING Vysya Bank, GNPA surged QoQ by
~40 bps at 2.3% in Q1FY16 owing to incremental addition of stressed assets. In
Q1FY18, GNPA was at 2.6% (`3726.6cr) & NNPA was 1.2% (`1777.9cr) almost
flat QoQ. Completion of integration of ING Vysya Bank has started to benefit the
bank in terms of customer acquisition as well as cross selling opportunities.
Momentum in life insurance and securities business is expected to continue
ahead. Further, incremental capital will enable to explore organic and inorganic
growth opportunities. It has shown good consistent profit growth of 21.89% over
5 years KMB has a RoE 13.45% and is trading at a valuation P/BV of 4.78x of
FY17 earnings. Hence BUY.
BUY
CMP `970
52 Week High / Low
1030.85/692.4
Avg. Daily Volume
342,319
Bank
Market Cap (` cr)
184,798
5
BSE Sensex
31,196
Nifty
9,722
Face Value (`)
Reuters Code
KTKM.NS
KMB:IN
0.7
Vaibhav Agrawal
022 3935 7800 Ext: 6808
[email protected]gelbroking.com
Kotak Mahindra Bank Ltd
Others | Bank
August 21, 2017
2
Kotak Mahindra Bank Ltd |Bank
June 5, 2017
2
Research Team Tel: 022 - 39357800 E-mail: [email protected] Website: www.angelbroking.com
DISCLAIMER
Angel Broking Private Limited (hereinafter referred to as “Angel”) is a registered Member of National Stock Exchange of India Limited,
Bombay Stock Exchange Limited and Metropolitan Stock Exchange Limited. It is also registered as a Depository Participant with CDSL
and Portfolio Manager with SEBI. It also has registration with AMFI as a Mutual Fund Distributor. Angel Broking Private Limited is a
registered entity with SEBI for Research Analyst in terms of SEBI (Research Analyst) Regulations, 2014 vide registration number
INH000000164. Angel or its associates has not been debarred/ suspended by SEBI or any other regulatory authority for accessing
/dealing in securities Market. Angel or its associates/analyst has not received any compensation / managed or co-managed public
offering of securities of the company covered by Analyst during the past twelve months.
This document is solely for the personal information of the recipient, and must not be singularly used as the basis of any investment
decision. Nothing in this document should be construed as investment or financial advice. Each recipient of this document should
make such investigations as they deem necessary to arrive at an independent evaluation of an investment in the securities of the
companies referred to in this document (including the merits and risks involved), and should consult their own advisors to determine
the merits and risks of such an investment.
Reports based on technical and derivative analysis center on studying charts of a stock's price movement, outstanding positions and
trading volume, as opposed to focusing on a company's fundamentals and, as such, may not match with a report on a company's
fundamentals. Investors are advised to refer the Fundamental and Technical Research Reports available on our website to evaluate the
contrary view, if any.
The information in this document has been printed on the basis of publicly available information, internal data and other reliable
sources believed to be true, but we do not represent that it is accurate or complete and it should not be relied on as such, as this
document is for general guidance only. Angel Broking Pvt. Limited or any of its affiliates/ group companies shall not be in any way
responsible for any loss or damage that may arise to any person from any inadvertent error in the information contained in this report.
Angel Broking Pvt. Limited has not independently verified all the information contained within this document. Accordingly, we cannot
testify, nor make any representation or warranty, express or implied, to the accuracy, contents or data contained within this document.
While Angel Broking Pvt. Limited endeavors to update on a reasonable basis the information discussed in this material, there may be
regulatory, compliance, or other reasons that prevent us from doing so.
This document is being supplied to you solely for your information, and its contents, information or data may not be reproduced,
redistributed or passed on, directly or indirectly.
Neither Angel Broking Pvt. Limited, nor its directors, employees or affiliates shall be liable for any loss or damage that may arise from
or in connection with the use of this information.
Disclosure of Interest Statement Kotak Bank
1. Financial interest of research analyst or Angel or his Associate or his relative No
2. Ownership of 1% or more of the stock by research analyst or Angel or associates or relatives No
3. Served as an officer, director or employee of the company covered under Research No
4. Broking relationship with company covered under Research No
Ratings (Based on expected returns Buy (> 15%) Accumulate (5% to 15%) Neutral (-5 to 5%)
over 12 months investment period): Reduce (-5% to -15%) Sell (< -15)