Mutual Funds Commodities Research Tax Planning IPO Our Team Contact Us    
Google
Web www.equitybulls.com
Union Budget
Budget 2011-2012 Home
Industry Expectations - Budget 2011-2012
Industry Reactions - Budget 2011-2012
Budget 2010-2011
Budget 2010-2011 Home
Industry Expectations - Budget 2010-2011
Industry Reactions - Budget 2010-2011
Contributor's Corner
Bonanza Portfolio
Hemant K Gupta
Krish Bhatt
S A A R T H I
Trinity Investments
Exchange Information
BSE 2009 Holidays
NSE 2009 Holidays
Investor Guide
Depository & Dematerialisation
Grievance Redressal
Investor Guide
SEBI
Trading of Securities
Transfer of Securities
Your Rights
Budget 2009-2010
Budget 2009-2010 Home
Industry Expectations - Budget 2009-2010
Industry Reactions - Budget 2009-2010
Interim Budget 2009-2010 Home
Industry Expectations - Interim Budget 2009
Budget 2008-2009
Railway Budget 2008-2009
Industry Expectations - Budget 2008
Union Budget 2008-2009
Highlights of Budget 2008-2009
Summary of Budget 2008-2009
Industry Reactions - Budget 2008
IPOs
Current IPOs
Past IPOs
IPO Subscription
Mutual Funds
Gold Exchange Traded Fund
MF Unique Holding
Forthcoming Dividends
ELSS Schemes Comparison
Tax Plans
New Fund Offers
Research
Arbitrages
Equity
Market Whispers
Tax Planning
Home
Equity Linked Savings Scheme
Post Office MIS
9% GOI Senior Citizens Savings Scheme
8% Savings (Taxable) Bonds
Kisan Vikas Patra
National Savings Certificate
Public Provident Fund
Research

| More

Kotak Mahindra Bank Limited - An Entrepreneurial Bank - Antique

Posted On: 2013-07-06 22:21:28

Kotak Mahindra bank (KMB) has successfully transformed itself from a mere NBFC/capital market proxy into a full-fledged credible banking franchise over the last decade with lending business contributing around ~83% of earnings vs. ~40% in FY08. Unlike some of its peer group banks, KMB has been extremely prudent in its selection of credit and always focused on risk adjusted return on its asset book which has resulted in the bank being on an extremely strong footing in such turbulent times. Higher granularity in savings franchise and increase in cross-sell to overall group customers are some of the key differentiating aspects which will result in the bank building a sustainable liability franchise in the long run. We believe that the bank is extremely well positioned to participate in next credit cycle given well capitalized position, stable asset quality, scalable business model and excellent execution track record. Hence we initiate coverage on the stock with a BUY rating and a TP of INR 806/share based on SOTP methodology.

Well diversified loan mix; prudent credit selection hold the key

Since its inception, the bank has always followed a risk adjusted return strategy on both its retail and wholesale loan book. Hence despite pursing a growth strategy (loan has been at 29% over FY08-13 vs. systemic growth of 18%), asset quality has remained stable across business cycles. The bank has an extremely diversified, granular loan book. In retail loans, car, tractor and CV financing are its key niches while in wholesale loans it focuses on primarily working capital and trade financing. Unlike its peers, the bank has been extremely prudent in avoiding exposures to chunky project loans. We expect Kotak to maintain its current loan growth strategy without diluting its risk profile and expect loan growth at 24% CAGR over FY13-15e.

Liability franchise rolls out on; Focus on granularity, higher customer transactions and cross sell

The bank is adopting a more calibrated approach in building its liability franchise with a concerted focus on building granular savings deposits. Savings rate de-regulation by the RBI has given the bank a strategic fillip which the bank is leveraging aggressively to acquire customers. The bank is also using loyal customer base of its group entities (Kotak Prime and Kotak Securities) to make significant inroads into savings deposits.

Excellent Top Management Team; Minimal top management churn

The Top Management has been with founder Uday Kotak for close two decades and has seen it grown from a capital market and niche NBFC player into a full fledged bank. Further, senior management have seen significant value unlocking from employee stock options. Hence management churn is almost negligible. Feedback from both top and senior management is that culture at the bank is refreshingly entrepreneurial which distinguishes the bank from its peer group.


Source: Equity Bulls

Click here to send ur comments or to feedback@equitybulls.com


Disclaimer:The article above is a gist / extract of the original report prepared by the research firm / brokerage firm. This article is not to be considered as an offer to sell or a solicitation to buy any securities. This article is meant for general information only. www.equitybulls.com, its employees or owners or the research firms, its employees or owners won't be responsible for any liability that may arise from information, errors or omissions in these articles. www.equitybulls.com or its employees or owners / the research firms or its employees or clients or owners may from time to time hold positions in securities referred in this article. For detailed research reports, please contact the concerned research firm directly.





Other Headlines:

RSWM Limited - Q4FY16 Result Update - Anand Rathi
Views on IL&FS Transportation Networks Ltd 4QFY2016 Results: Angel Broking
Views on MM Forgings Ltd. 4QFY2016 Results - Angel Broking
Ujjivan listing - CapitalVia Global Research
Dewan Housing Finance - 4QFY2016 Result Update - Angel Broking
Procter & Gamble Hygiene & Health Care - 3QFY2016 Result Update - Angel Broking
Sanofi India - 1QCY2016 Result Update - Angel Broking
Views on HDFC Ltd. 4QFY2016 Results: Angel Broking
Views on Alembic Pharmaceuticals Ltd 4QFY2016 Results: Angel Broking
Rallis India - 4QFY2016 Result Update - Angel Broking
Views on United Phosphorous Ltd 4QFY2016 Results: Angel Broking
Views on Sanofi India Ltd 1QCY2016 Results: Angel Broking
Views on ICICI Bank 4QFY2016 Results: Angel Broking
Views on ACC Ltd. 1QCY2016 Results: Angel Broking
Views on HCL Technologies Ltd 3QFY2016 Results: Angel Broking
Views on Elecon Engineering Company Ltd. 4QFY2016 Results: Angel Broking
Tata Consultancy Services - 4QFY2016 Result Update - Angel Broking
Views on Sadbhav Engineering Ltd. 4QFY2016 Results: Angel Broking
Views on Yes Bank 4QFY2016 Results: Angel Broking
Views on Rallis India Ltd 4QFY2016 Results: Angel Broking
Views on Axis Bank 4QFY2016 Results: Angel Broking
Views on Mahindra Lifespace Developers Ltd. 4QFY2016 Results: Angel Broking
Centrum Indian Railways conference - Event Update - Accelerating on the right track
Infosys - 4QFY2016 Result Update - Angel Broking
Views on Ultratech Cements 4QFY2016 Results: Angel Broking
Views on TCS 4QFY2016 Results: Angel Broking
Views on LIC Housing Finance 4QFY2016 Results: Angel Broking
Views on Infosys 4QFY2016 Results: Angel Broking
Procter & Gamble Hygiene & Health Care - Quick Take - Angel Broking
FMCG - Results Preview - Volumes expected to remain subdued - Reliance Securities
Auto sales recovery in sight - CSEC Research
Auto industry ending the year on a good note - LKP Research
Maintain Buy on MBL Infrastructures - Angel Broking
BUY JK Lakshmi Cement: AnandRathi Institutional Research
BUY Ashok Leyland: AnandRathi Institutional Research
BUY Interglobe Aviation - AnandRathi Institutional Research
BUY ITD Cementation: AnandRathi Institutional Research
BUY Suven Life Sciences: AnandRathi Institutional Research
BUY Ahluwalia Contracts (India) - AnandRathi Institutional Research
BUY KNR Constructions: AnandRathi Institutional Research
Ceat Ltd 3QFY2016 Results: Angel Broking
Sun Pharmaceuticals 3QFY2016 Results: Angel Broking
HOLD HIL: AnandRathi Institutional Research
MBL Infrastructures 3QFY2016 Results: Angel Broking
Canara Bank 3QFY2016 Results: Angel Broking
BUY NRB Bearings: AnandRathi Institutional Research
Coal India (CIL) 3QFY2016 Results: Angel Broking
Ashok Leyland Ltd (ALL) 3QFY2016 Results: Angel Broking
Hero MotoCorp 3QFY2016 Results: Angel Broking
IL&FS Transportation Network (ITNL) 3QFY2016 Results: Angel Broking


Website Created & Maintained by : Chennai Scripts
West Mambalam, Chennai - 600 033,
Tamil Nadu, India

disclaimer copyright © 2005 - 2014