Accumulate Kotak Mahindra Bank, target Rs 1239: Prabhudas Lilladher

Prabhudas Lilladher has an accumulate call on Kotak Mahindra Bank Ltd. with a target price of Rs 1239. The current market price of Kotak Mahindra Bank Ltd. is Rs 1244.45.
The time period given by the analyst is a year when Kotak Mahindra Bank Ltd. price can reach the defined target.
Kotak Mahindra Bank Ltd., incorporated in 1985, has a market cap of Rs 239603.55 crore.

Investment rationale by Prabhudas Lilladher:Kotak Mahindra Bank’s standalone earnings were slightly lower than expectations at Rs11.2bn (PLe: Rs 12 bn) on back of higher provisions (non NPA related) and hit on opex from change in gratuity assumptions. Loan growth momentum of 25% YoY was a positive surprise, while accretion in CASA also has been phenomenal. Subsidiariesespecially the financial savings business continues to see good growth & profitability, while the capital market businesses were slightly slower this quarter. Management expects loan growth of 20% with steady growth in corporate, CV/CEs and retail segments and continue its traction on CASA mainly driven from its digitaldrive. We retain “Accumulate” with revised TP of Rs1,239 (up from Rs1,165) based on Mar‐20 SOTP with lending biz valued at 3.5x ABV.