Kotak Mahindra Bank - Q1 FY22 Result Update - YES Securities

(Rating: ADD, TP: Rs1895, Upside: 9%)

- Asset quality: Annualized slippage ratio for 1QFY22 was elevated at 2.72%, with management flagging that a significant decline in slippages lay ahead

- Margin picture: Consolidated NIM at 4.66% was up 21 bps QoQ, with management making statements that imply NIM could inch up going forward

- Asset growth: Advances de-grew/grew -2.8%/6.6% QoQ/YoY driven by mortgage loans and SME loans

- Opex control: Total opex de-grew/grew -26.8%/23.4% QoQ/YoY as several costs absent last year showed up this year

- Fee income: Fee income declined -40.0% QoQ due to weakness in distribution and syndication fees, which de-grew -37.3% QoQ

- We maintain 'Add' rating on KMB with a revised price target of Rs 1895: We value the consolidated bank at 3.5x FY23 P/BV for an FY22E/23E/24E RoE profile of 12.3/12.7/13.4%.

Shares of KOTAK MAHINDRA BANK LTD. was last trading in BSE at Rs. 1697.95 as compared to the previous close of Rs. 1740.4. The total number of shares traded during the day was 66798 in over 5312 trades.

The stock hit an intraday high of Rs. 1750.95 and intraday low of 1695. The net turnover during the day was Rs. 114519846.

Source : Equity Bulls

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