I-Sec maintains Buy on Kotak Mahindra Bank, revises target price to Rs 2,500

ICICI Securities has a Buy call on Kotak Mahindra Bank with a target price of Rs 2,500. The current market price of Kotak Mahindra Bank is Rs 2,079.85. Kotak Mahindra Bank, incorporated in 1985, has a market cap of Rs 412357.45 crore.

Kotak Mahindra Bank 's 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-2024.



Financials
For the quarter ended 31-03-2025, the company has reported a Consolidated Total Income of Rs 27174.42 crore, up 13.48% from last quarter Total Income of Rs 23945.79 crore and down -2.63 % from last year same quarter Total Income of Rs 27907.33 crore. The bank has reported net profit after tax of Rs 4932.76 crore in the latest quarter.


Investment Rationale
Kotak Mahindra Bank reported weaker-than-expected performance on business growth and NII growth, though strong other income (up 21% QoQ) aided reported PAT of Rs 35.5 billion (8% beat). RoA and CET 1 stood at 2.16/21.1%. Asset quality was comfortable with improved slippages (1.4% vs. 1.6% QoQ) and rise in PCR to 78% (vs. 73% QoQ). Credit costs were stable at ~64bps, but reported provisioning surged on Rs 560 million AIF provisioning. Stress formation in PL is improving and stable for credit cards, as per KMB. Advances growth moderated sharply to 13.5% YoY (3% QoQ) vs. 15?18% YoY run-rate. Growth in consumer (up 17% YoY/5% QoQ) and SME (up 31% YoY/6% QoQ) was strong, though corporate (4% QoQ de-growth) and commercial (muted 2% QoQ) dragged overall growth. KMB maintains its broad guidance of 1.5?2x nominal GDP growth and does not see much change in the business risk environment. ICICI Securities maintains BUY with a revised target price of Rs 2,500 (vs. Rs 2,450), valuing the stock at ~2.6x FY27E core banking business. Key risks are higher-than-expected rise in slippages and slower deposits growth.


Promoter/FII Holdings
Promoters held 25.88 per cent stake in the company as of 31-Mar-2025, while FIIs owned 32.65 per cent, DIIs 28.98 per cent.