Buy Kotak Mahindra Bank, target price Rs 2451: ICICI Securities

ICICI Securities has buy call on Kotak Mahindra Bank with a target price of Rs 2451. The current market price of Kotak Mahindra Bank is Rs 1785.65. Time period given by analyst is one year when Kotak Mahindra Bank Ltd. price can reach defined target.

Kotak Mahindra Bank Ltd., incorporated in the year 1985, is a banking company (having a market cap of Rs 352469.59 Crore).

Kotak Mahindra Bank Ltd. key Products/Revenue Segments include Interest & Discount on Advances & Bills, Income From Investment, Interest On Balances with RBI and Other Inter-Bank Funds and Interest for the year ending 31-Mar-2021.



Financials
For the quarter ended 31-12-2021, the company reported a Consolidated Total Income of Rs 14176.16 Crore, down -7.60 % from last quarter Total Income of Rs 15341.65 Crore and down -4.44 % from last year same quarter Total Income of Rs 14834.99 Crore. The bank reported net profit after tax of Rs 3402.74 Crore in latest quarter.


Investment Rationale
The stock has given nil return in past one year and underperformed Nifty by ~20% and Bank Nifty by ~10%. It currently trades at 3x one-year forward BV (standalone after adjusting for subsidiaries), lower than its 5-year average valuation. It maintains BUY with an unchanged target price of Rs2,451. Key monitorables: 1) Elevated cost ratios; 2) succession planning related to MD & CEO retirement in Dec’23.

Promoter/FII Holdings
Promoters held 25.99 per cent stake in the company as of 31-Dec-2021, while FIIs owned 42.06 per cent, DIIs 15.5 per cent.