Kotak Mahindra Bank (KMB IN)

Rating: HOLD | CMP: Rs1,627 | TP: Rs1,586

October 22, 2019 Still standing tall given the environment

Q2FY20 Result Update Quick Pointers

☑ Change in Estimates |  Target |  Reco  Strong retail deposits accretion especially CASA leads to industry leading
CASA mix of 53% (48% on quarterly average basis)
Change in Estimates
Current
FY21E FY22E
Previous
FY21E FY22E
 NIM further improves by 12bps to 4.61% on strong tailwinds from lowered cost
Rating HOLD HOLD of deposits.
Target Price 1,586 1,586
NII (Rs. m) 183,726 215,188 186,207 220,217
KMB’s s’lone earnings of Rs17.2bn (PLe: 15.5bn) was better than
% Chng. (1.3) (2.3)
Op. Profit (Rs. m) 156,743 183,266 157,513 185,687 expectations on back of benefit from lower tax rate and decent beat in NII &
% Chng. (0.5) (1.3)
EPS (Rs.) 54.4 63.9 54.3 64.1
lower opex. Loan growth further has come off to 15% YoY (12% incl Prime)
% Chng. 0.2 (0.3) mainly slower growth from corporate & auto loans. Key positives were (i)
strong accretion in retail deposits especially CASA which grew at 21% YoY
Key Financials - Consolidated EOP & 18% YoY on average basis and (ii) strong tailwinds from focus on retail
Y/e Mar FY19 FY20E FY21E FY22E low cost liabilities & benefit from cut in savings rate has helped to reached
NII (Rs m) 129,771 157,451 183,726 215,188
peak NIMs of 4.6%. Debate continues on growth as risk adjusted margin have
Op. Profit (Rs m) 108,713 133,338 156,743 183,266
PAT (Rs m) 65,175 87,010 104,140 122,303 been not commensurate and slowing economy has led to uptick in stress as
EPS (Rs.) 34.0 45.5 54.4 63.9 evident in this quarter’s asset quality. Given the environment, we retain our
Gr. (%) 15.8 33.6 19.7 17.5
DPS (Rs.) 0.9 1.2 1.4 1.4 HOLD rating with TP of Rs1,586 (unchanged) based on Sep-21 SOTP.
Yield (%) 0.1 0.1 0.1 0.1
NIM (%) 4.1 4.3 4.4 4.5  Operating performance better despite slowing growth: NII grew by 24.6%
RoAE (%) 12.4 14.4 14.9 15.0
RoAA (%) 1.9 2.3 2.4 2.4
YoY on 12bps QoQ improvement in NIMs to 3.6% and despite loan growth
P/BV (x) 5.6 4.8 4.2 3.6 further coming off to 15.3% YoY. Strong accretion in low cost of deposits and
P/ABV (x) 5.8 5.0 4.3 3.7 reduction in rates (lowered gap in savings rate & TD rate), has led to getting
PE (x) 47.8 35.8 29.9 25.4
CAR (%) 16.9 18.5 18.5 18.5 back to peak NIMs. Other income was slower with steady fee growth of 14%
YoY, but was offset by steady opex growth of 15% YoY leading to a PPOP
growth of 20% YoY slightly ahead of expectations.
Key Data KTKM.BO | KMB IN
52-W High / Low
Sensex / Nifty
Rs.1,684 / Rs.1,098
38,964 / 11,588
 Cautionary stance on business but low cost deposit engine running well :
Market Cap Rs.3,107bn/ $ 43,774m Bank loan growth further came off to 15% YoY with incl. Prime Auto loans at
Shares Outstanding 1,910m
3M Avg. Daily Value Rs.8912.02m
12% YoY with some risk aversion in corporate loans which come off from 14-
15% to ~7-8% YoY and slowdown in vehicle loans incl. CVs. Rest segment
Shareholding Pattern (%) portfolio have grown +20% and sees no hiccups in growth for bank especially
Promoter’s 29.27 retail. Management has guided for mid-teens to higher loan growth but with
Foreign 40.15 caution with high focus on risk adj. margins. Hence, core to the strategy has
Domestic Institution 20.53
Public & Others 10.05 been strong accretion in low cost retail liabilities in both savings and TDs which
Promoter Pledge (Rs bn) - have grown by 21% YoY & 25% respectively and CASA mix of 53% (48.8% on
quarterly average), highest amongst the industry.
Stock Performance (%)
1M 6M 12M  Asset quality marginal blip: Bank’s asset quality slightly deteriorated (higher
Absolute 5.7 19.9 39.8
Relative 3.1 20.5 23.1
than expected) with delinquencies witnessed from CV/Auto/Agri Crop and one
small asset from corporate book. Given the deterioration credit cost was up at
75bps (64bps in H1FY20) and hence overall guidance was lifted to 60bps for
Pritesh Bumb
priteshbumb@plindia.com | 91-22-66322232 FY20. But management is not seeing any hit to asset quality although similar
Riddhi Mehta to peers have seen uptick in the unsecured portfolio but not alarming.
riddhimehta@plindia.com | 91-22-66322258
 Tax rate benefit help subs also shine: Prime operating performance was
better despite slower growth, while insurance also was decent, while other
subs saw tax cut benefit in earnings.

October 22, 2019 1

 Kotak Mahindra Bank

Q2FY20 Financials – Strong operating performance but slight

decline seen in asset quality
YoY gr. QoQ gr.
Standalone (Rs mn) Q2FY20 Q2FY19 Q1FY20
(%) (%)
Interest Income 67,616 58,109 16.4 66,277 2.0
Interest Expense 34,120 31,218 9.3 34,668 (1.6)
Net interest income (NII) 33,496 26,891 24.6 31,609 6.0
Other income 12,244 12,053 1.6 13,169 (7.0)
Total income 45,740 38,944 17.5 44,778 2.1
Operating expenses 20,654 17,994 14.8 20,789 (0.6)
-Staff expenses 9,150 7,452 22.8 9,015 1.5
-Other expenses 11,504 10,542 9.1 11,773 (2.3)
Operating profit 25,086 20,950 19.7 23,989 4.6
Total provisions 4,079 3,538 15.3 3,168 28.8
Profit before tax 21,006 17,412 20.6 20,822 0.9
Tax 3,762 5,995 (37.3) 7,220 (47.9)
Profit after tax 17,245 11,417 51.1 13,602 26.8

Balance sheet (Rs mn)

Deposits 23,30,715 20,58,298 13.2 23,29,310 0.1
Advances 21,32,994 18,49,403 15.3 20,80,300 2.5

YoY gr. QoQ gr.

Ratios (%) Q2FY20 Q2FY19 Q1FY20
(%) (%)
Profitability ratios
RoaA 2.2 1.6 56 1.8 44
RoaE - Calc 15.3 11.7 361 12.5 281
NIM 4.6 4.2 41 4.5 12

Asset Quality ratios

Gross NPL 50,336 40,331 24.8 46,135 9.1
Net NPL 18,114 15,008 20.7 15,244 18.8
Gross NPL ratio 2.3 2.2 17 2.2 13
Net NPL ratio 0.9 0.8 4 0.7 12
Coverage ratio 64.0 62.8 122 67.0 (294)

Business & Other Ratios

Low-cost deposit mix 53.6 50.2 340 50.7 290
Cost-income ratio 45.2 46.2 (105) 46.4 (127)
Non int. inc / total income 26.8 30.9 (418) 29.4 (264)
Credit deposit ratio 91.5 89.9 167 89.3 221
CAR 18.2 17.4 80 17.3 90
Tier-I 17.6 18.0 (40) 17.8 (20)

Source: Company, PL

October 22, 2019 2

 Kotak Mahindra Bank

Key Q2FY20 Conference Call highlights

Business Outlook

 Liabilities - Low cost liabilities continue to be of core strategy of franchise and

hence bank has been relentlessly focused on same and currently below
Rs50mn bucket (CASA+deposits) forms 85% of book. CASA focus improves
Cost of Funds to 5.37% down 14bps QoQ on lowering of savings rate in lower
end & higher end of ticket sizes.

 Assets – There has been a slowdown in the economy from excessive

monsoon trails within few geographies leading to with weakness in CVs, PVs
and Residential Real Estate sectors for H1FY20. Corporate loans growth has
slowed on back of run-off in certain loans, while cautious flattish growth
continues in business banking segment. Currently, bank has been focused on
strong pricing led growth strategy and hence selective and has also been doing
a steady growth in Retail.

 Have been taking higher risks in real estate as contra call. Having said same
Increased exposure to CRE book not to be form of worry as the Bank deals
majorly with “A” category builders, thoroughly vets the project and its cash
flows and usually experiences prepayment of loans.

 Bank expects an overall loan growth in the range of mid-teens plus but within
the range of risk adjusted returns should be commensurate

Margins

 Margins – With benefits from both efficient liabilities management and higher
pricing in loans, NIMs are expected to remain above 4.3%. Relentless focus
on low-cost liabilities and improved ability of better risk pricing contribute to
stronger NIIs and should be better than expectations.

Asset Quality

 With gross slippages for Q2FY20 around Rs10.0bn and Rs18.0bn for H1FY20
with deteriorated economic environment. With the same view banks has
increased slightly upward its credit cost guidance to 60bps from 50-55bps in
FY20.

 Delinquencies are from CV and Agri crop (from erstwhile ING) while
Wholesale book has no major negative other than a single approx. Rs1.0bn
account. Unsecured retail has seen uptick in stress while Secured Retail
book continues to be stable

Subsidiaries

 Life insurance portfolio continues to well with premium income growing at 28%
YoY. Portfolio has 20-25% is guaranteed returns while rest is non-participating
products. Kotak Securities does well delivering a PAT growth of 33% YoY.
Kotak investment saw steady Net NPA with slight deterioration. Other subs
were mixed in performance with Prime slowing down as auto demand has been
increasingly getting sluggish.

October 22, 2019 3

 Kotak Mahindra Bank

Consolidated Loan Book – Caution & watchful on loan growth

YoY gr. QoQ gr.
Loan Book (Rs mn) Q2FY20 Q2FY19 Q1FY20
(%) (%)
Parts of retail like Auto loans (via CV/CE 1,96,880 1,70,480 15.5 1,99,100 (1.1)
Prime) saw higher slowdown, while Auto Loans 1,90,550 2,06,960 (7.9) 1,95,740 (2.7)
other retail growth was slower Personal Loans, Small biz 3,48,520 2,91,430 19.6 3,37,190 3.4

Corporate/Biz banking growth was Home loans & LAP 4,43,710 3,60,640 23.0 4,22,430 5.0
also tepid as bank makes some Corporate & Biz Banking 9,31,130 8,58,940 8.4 9,20,920 1.1
adjustments to portfolio, while Agriculture 2,70,680 2,24,250 20.7 2,59,860 4.2
continues to be selective on biz Others 1,05,930 1,09,020 (2.8) 1,14,660 (7.6)
banking Total Advances 24,87,400 22,21,720 12.0 24,49,900 1.5

bp chg bp chg
Loan Book mix (%) Q2FY20 Q2FY19 Q1FY20
YoY QoQ
CV/CE 7.9 7.7 24 8.1 (21)
Auto Loans 7.7 9.3 (165) 8.0 (33)
Personal Loans, Small Biz 14.0 13.1 89 13.8 25
Home loans & LAP 17.8 16.2 161 17.2 60
Corporate & Biz Banking 37.4 38.7 (123) 37.6 (16)
Agriculture 10.9 10.1 79 10.6 28
Others 4.3 4.9 (65) 4.7 (42)

Source: Company, PL

Margins improve as pricing comfort strengthens

NIM (%)

5.0%
4.9% 4.9%
5.0%
4.6%
4.6%
4.7% 4.5% 4.5%
4.5%
4.3% 4.4% 4.3% 4.4%
4.5% 4.5%
4.2%
4.4%
4.3% 4.3%
4.3%
4.2% 4.2%
4Q14

2Q15

4Q15
1Q16
2Q16
3Q16

1Q17

3Q17
4Q17

2Q18

4Q18
1Q19
2Q19
3Q19

1Q20
1Q15

3Q15

4Q16

2Q17

1Q18

3Q18

4Q19

2Q20

Source: Company, PL

CASA book reaches new highs with strong support from SA bucket

CASA (%)

53% 54%
51%
48% 50%
44% 51%
39% 50% 51%
36%36% 35% 37% 47%
44%
32% 31% 42%
38%
34%
31% 32%
4Q14
1Q15

3Q15
4Q15
1Q16

4Q16
1Q17
2Q17

4Q17
1Q18
2Q18

1Q19
2Q19
3Q19

1Q20
2Q20
2Q15

2Q16
3Q16

3Q17

3Q18
4Q18

4Q19

Source: Company, PL
October 22, 2019 4
 Kotak Mahindra Bank

Asset quality declines slightly as slippages rise… … leading to a spike in Credit Costs

Gross NPA (%) Net NPA (%) Credit Cost

1.2%
3.0%
1.0%
2.5%
0.8%
2.0%
1.5% 0.6%

1.0% 0.4%

0.5% 0.2%

0.0% 0.0%
3Q15
4Q15
1Q16
2Q16
3Q16
4Q16
1Q17
2Q17
3Q17
4Q17
1Q18
2Q18
3Q18
4Q18
1Q19

3Q19
4Q19

2Q20
2Q19

1Q20

3Q15
4Q15
1Q16
2Q16
3Q16

1Q17
2Q17
3Q17
4Q17
1Q18
2Q18
3Q18
4Q18
1Q19
2Q19
3Q19
4Q19

2Q20
4Q16

1Q20
Source: Company, PL Source: Company, PL

Consolidated performance Table – Tax benefit for certain subs

Kotak Prime does relatively well on Consol Financials YoY gr. QoQ gr.
Q2FY20 Q2FY19 Q1FY20
operating performance despite slower (Rs mn) (%) (%)
loan growth and earnings Standalone Bank 17,245 11,417 51.1 13,602 26.8
Kotak Prime 1,720 1,570 9.6 1,530 12.4
Insurance biz continues to deliver on KMCC 10 140 (92.9) 450 (97.8)
growth & earnings Kotak Securities 1,490 1,120 33.0 1,100 35.5

Kotak Sec delivers impressive bottom International Subs 340 470 (27.7) 290 17.2
line Kotak AMC 850 520 63.5 730 16.4
Kotak Mah. Investments 670 450 48.9 630 6.3
Lending business 18,965 12,987 46.0 15,132 25.3
Other subs have been mixed bag in Flow business 3,360 2,700 24.4 3,200 5.0
earnings and performance Consol PAT (ex -
22,630 16,200 39.7 17,980 25.9
insurance)
Insurance 1,440 1,270 13.4 1,340 7.5
Consolidated PAT 24,070 17,470 37.8 19,320 24.6

Source: Company, PL

Kotak Securities and Life ins performance come in impressive

Kotak Prime Kotak Sec KMCC Kotak Life AMC Intl. subs KIAL KIL
6,200
5,400
4,600
3,800
(Rs m )

3,000
2,200
1,400
600
(200)
1Q16
2Q16

4Q16

2Q17
3Q17

1Q18

3Q18
4Q18
1Q19
2Q19

4Q19
1Q20
2Q20
4Q15

3Q16

1Q17

4Q17

2Q18

3Q19

Source: Company, PL

October 22, 2019 5

 Kotak Mahindra Bank

Consolidated ROEs – Return ratios improvement from margins,

stable cost metrics
Du-pont Analysis FY15 FY16 FY17 FY18 FY19 FY20E FY21E FY22E
Net Interest Income 4.54% 4.84% 4.34% 4.26% 4.08% 4.30% 4.41% 4.51%
Fees 2.49% 2.29% 2.15% 2.36% 2.25% 2.23% 2.27% 2.27%
Investment profits 0.31% 0.17% 0.25% 0.16% 0.07% 0.07% 0.06% 0.06%
Net revenues 7.35% 7.30% 6.74% 6.78% 6.40% 6.60% 6.74% 6.84%
Operating Expense -3.68% -3.95% -3.19% -3.14% -2.98% -2.95% -2.98% -3.00%
Provisions -0.16% -0.57% -0.40% -0.37% -0.32% -0.40% -0.37% -0.37%
Taxes -1.20% -0.92% -1.05% -1.12% -1.05% -0.86% -0.89% -0.91%
Total Costs -5.04% -5.44% -4.64% -4.64% -4.35% -4.22% -4.24% -4.28%
ROA 2.31% 1.86% 2.10% 2.14% 2.05% 2.38% 2.50% 2.56%
Equity/Assets 16.50% 15.72% 15.68% 16.36% 16.36% 16.33% 16.64% 16.89%
ROE 14.0% 11.8% 13.4% 13.1% 12.5% 14.6% 15.0% 15.2%

Source: Company, PL

Change in estimates table – We cut our business growth estimates, while increase margins and credit costs
Old Revised %Change
(Rs mn)
FY20E FY21E FY22E FY20E FY21E FY22E FY20E FY21E FY22E
Net interest income 1,56,230 1,86,207 2,20,217 1,57,451 1,83,726 2,15,188 0.8 (1.3) (2.3)
Operating profit 1,31,877 1,57,513 1,85,687 1,33,338 1,56,743 1,83,266 1.1 (0.5) (1.3)
Net profit 86,176 1,03,678 1,22,414 86,759 1,03,877 1,22,027 0.7 0.2 (0.3)
EPS (Rs) 45.1 54.3 64.1 45.5 54.4 63.9 0.7 0.2 (0.3)
ABVPS (Rs) 328.5 384.4 448.7 325.9 380.4 443.0 (0.8) (1.0) (1.3)
Price target (Rs) 1,586 1,586 0.0
Recommendation HOLD HOLD

Source: Company, PL

We broadly maintain TP at Rs1,586 based on Sep-21 SOTP

Value Per Share
Valuation Basis
(Rs m) (Rs)
Lending biz valuation 2,336,676 1,224 3.4x Sep-21 Book
Kotak Securities 1,47,275 77 20x Sep-21 Earnings
Asset Management 1,48,925 78 7% of AUMs
KMCC 13,249 7 17x Sep-21 Earnings
International subsidiaries 27,358 14 2.3x Sep -21 Book
Others 82,511 43 15x Sep -21 Earnings
Insurance 2,71,409 142 2.4x EV & 22x NB on Sep -21
Total Subsidiary Valuation 6,90,726 362
Sep-21 based PT 1,586

Source: Company, PL

October 22, 2019 6

 Kotak Mahindra Bank

KMB Standalone – one year forward P/ABV trend

P/ABV 3 yr avg. avg. + 1 SD avg. - 1 SD

7.0
6.5
6.0
5.5
5.0
4.5
4.0
3.5

Jan-14

Jan-15

Jan-16

Jan-17

Jan-18

Jan-19
Jul-14

Jul-15

Jul-16

Jul-17

Jul-18

Jul-19
Oct-13

Oct-14

Apr-15

Oct-15

Oct-16

Oct-17

Apr-18

Oct-18

Apr-19

Oct-19
Apr-14

Apr-16

Apr-17
Source: Company, PL

October 22, 2019 7

 Kotak Mahindra Bank
Income Statement (Rs. m) Quarterly Financials (Rs. m)
Y/e Mar FY19 FY20E FY21E FY22E Y/e Mar Q3FY19 Q4FY19 Q1FY20 Q2FY20
Int. Earned from Adv. 229,704 266,799 306,798 355,042 Interest Income 62,503 64,023 66,277 67,616
Int. Earned from invt. 48,728 53,364 60,263 68,218 Interest Expenses 33,113 33,544 34,668 34,120
Others 6,992 7,255 7,801 8,824 Net Interest Income 29,391 30,479 31,609 33,496
Total Interest Income 285,424 327,419 374,862 432,084 YoY growth (%) 26.6 22.3 19.7 9.3
Interest Expenses 155,652 169,968 191,136 216,897 CEB 10,380 11,870 11,620 11,620
Net Interest Income 129,771 157,451 183,726 215,188 Treasury - - - -
Growth(%) 14.4 18.6 16.3 16.3 Non Interest Income 9,639 12,703 13,169 12,244
Non Interest Income 73,665 83,918 96,984 111,319 Total Income 72,142 76,726 79,446 79,860
Net Total Income 203,437 241,368 280,710 326,506 Employee Expenses 8,370 8,567 9,015 9,150
Growth(%) 17.8 14.5 14.7 15.2 Other expenses 11,276 11,792 11,773 11,504
Employee Expenses 39,018 44,905 51,513 58,900 Operating Expenses 19,646 20,359 20,789 20,654
Other Expenses 55,706 63,125 72,453 84,340 Operating Profit 19,384 22,823 23,989 25,086
Operating Expenses 94,724 108,030 123,966 143,240 YoY growth (%) 6.5 13.1 18.0 19.7
Operating Profit 108,713 133,338 156,743 183,266 Core Operating Profits 19,384 22,823 23,989 25,086
Growth(%) 14.1 22.7 17.6 16.9 NPA Provision 2,550 2,397 2,726 3,977
NPA Provision 10,019 14,674 15,399 17,324 Others Provisions (323) 1,713 3,168 4,079
Total Provisions 10,054 14,797 15,509 17,423 Total Provisions (323) 1,713 3,168 4,079
PBT 98,659 118,541 141,234 165,843 Profit Before Tax 19,707 21,110 20,822 21,006
Tax Provision 33,484 31,532 37,094 43,540 Tax 6,798 7,032 7,220 3,762
Effective tax rate (%) 33.9 26.6 26.3 26.3 PAT 12,909 14,078 13,602 17,245
PAT 64,936 86,759 103,877 122,027 YoY growth (%) 22.6 25.2 32.7 51.1
Growth(%) 16.0 33.6 19.7 17.5 Deposits 2,138,040 2,258,804 2,329,310 2,330,715
YoY growth (%) 18.2 17.3 22.8 13.2
Balance Sheet (Rs. m)
Advances 1,964,320 2,056,948 2,080,300 2,132,994
Y/e Mar FY19 FY20E FY21E FY22E
YoY growth (%) 23.5 21.2 17.6 15.3
Face value 5 5 5 5
No. of equity shares 1,909 1,909 1,909 1,909 Key Ratios
Equity 9,544 9,544 9,544 9,544 Y/e Mar FY19 FY20E FY21E FY22E
Networth 559,984 647,693 752,555 875,856 CMP (Rs) 1,627 1,627 1,627 1,627
Growth(%) 13.8 15.7 16.2 16.4 EPS (Rs) 34.0 45.5 54.4 63.9
Adj. Networth to NNPAs 16,542 18,781 18,814 21,768 Book Value (Rs) 290 336 390 454
Deposits 2,258,804 2,575,036 2,974,167 3,450,033 Adj. BV (70%)(Rs) 282 326 380 443
Growth(%) 17.3 14.0 15.5 16.0 P/E (x) 47.8 35.8 29.9 25.4
CASA Deposits 1,185,857 1,366,039 1,580,750 1,837,120 P/BV (x) 5.6 4.8 4.2 3.6
% of total deposits 52.5 53.0 53.1 53.2 P/ABV (x) 5.8 5.0 4.3 3.7
Total Liabilities 3,632,894 4,073,847 4,649,500 5,338,588 DPS (Rs) 0.9 1.2 1.4 1.4
Net Advances 2,489,990 2,820,993 3,238,970 3,742,785 Dividend Payout Ratio (%) 2.6 2.7 2.5 2.1
Growth(%) 18.3 13.3 14.8 15.6 Dividend Yield (%) 0.1 0.1 0.1 0.1
Investments 755,982 845,923 945,222 1,063,539
Efficiency
Total Assets 3,637,894 4,078,847 4,654,500 5,343,588
Y/e Mar FY19 FY20E FY21E FY22E
Growth (%) 16.5 12.1 14.1 14.8
Cost-Income Ratio (%) 46.6 44.8 44.2 43.9
Asset Quality C-D Ratio (%) 110.2 109.6 108.9 108.5
Y/e Mar FY19 FY20E FY21E FY22E Business per Emp. (Rs m) 89 92 96 102
Gross NPAs (Rs m) 47,335 54,054 59,485 68,178 Profit per Emp. (Rs lacs) 12 15 16 17
Net NPAs (Rs m) 16,542 18,781 18,814 21,768 Business per Branch (Rs m) 3,392 3,854 4,438 5,138
Gr. NPAs to Gross Adv.(%) 1.9 1.9 1.8 1.8 Profit per Branch (Rs m) 47 62 74 87
Net NPAs to Net Adv. (%) 0.7 0.7 0.6 0.6
Du-Pont
NPA Coverage % 65.1 65.3 68.4 68.1
Y/e Mar FY19 FY20E FY21E FY22E
Profitability (%) NII 4.08 4.30 4.41 4.51
Y/e Mar FY19 FY20E FY21E FY22E Total Income 6.40 6.60 6.74 6.84
NIM 4.1 4.3 4.4 4.5 Operating Expenses 2.98 2.95 2.98 3.00
RoAA 1.9 2.3 2.4 2.4 PPoP 3.42 3.64 3.76 3.84
RoAE 12.4 14.4 14.9 15.0 Total provisions 0.32 0.40 0.37 0.37
Tier I 16.9 18.5 18.5 18.5 RoAA 2.05 2.38 2.50 2.56
CRAR 16.9 18.5 18.5 18.5 RoAE 12.52 14.56 15.03 15.17
Source: Company Data, PL Research Source: Company Data, PL Research

October 22, 2019 8

 Kotak Mahindra Bank

Price Chart Recommendation History

(Rs)
No. Date Rating TP (Rs.) Share Price (Rs.)
1650
1 3-Oct-19 Hold 1,586 1,616

1411 2 22-Jul-19 Hold 1,385 1,454

3 4-Jul-19 Hold 1,385 1,498

1173
4 1-May-19 Hold 1,385 1,387

934 5 5-Apr-19 Hold 1,291 1,336

6 21-Jan-19 Hold 1,291 1,268

696
Apr - 18

Apr - 19
Apr - 17
Oct - 16

Oct - 17

Oct - 18

Oct - 19
7 7-Jan-19 Hold 1,291 1,247
8 24-Oct-18 Hold 1,291 1,177

Analyst Coverage Universe

Sr. No. Company Name Rating TP (Rs) Share Price (Rs)
1 Axis Bank Accumulate 800 668
2 Bank of Baroda BUY 115 91
3 Bank of India Reduce 58 62
4 Federal Bank BUY 102 82
5 HDFC BUY 2,700 2,376
6 HDFC Bank BUY 1,406 1,229
7 HDFC Life Insurance Company BUY 585 593
8 ICICI Bank BUY 518 427
9 ICICI Prudential Life Insurance Company BUY 511 469
10 IDFC First Bank BUY 54 37
11 IndusInd Bank BUY 1,640 1,229
12 Jammu & Kashmir Bank Under Review - 32
13 Kotak Mahindra Bank Hold 1,586 1,616
14 Max Financial Services BUY 695 419
15 Punjab National Bank Reduce 51 59
16 SBI Life Insurance Company BUY 991 840
17 South Indian Bank BUY 18 10
18 State Bank of India BUY 388 254
19 Union Bank of India Reduce 44 52
20 YES Bank Hold 59 43

PL’s Recommendation Nomenclature (Absolute Performance)

Buy : > 15%
Accumulate : 5% to 15%
Hold : +5% to -5%
Reduce : -5% to -15%
Sell : < -15%
Not Rated (NR) : No specific call on the stock
Under Review (UR) : Rating likely to change shortly

October 22, 2019 9

 Kotak Mahindra Bank

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October 22, 2019 AMNISH

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Date: 2019.10.22 23:22:37 +05'30'