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Kotak Mahindra Bank -Banking profitability lower than estimated…
Net Profit at |187.8 crore for standalone bank was lower than estimated
due to higher opex, majorly from 25 years completion add campaigns and
mid year increments. Robust growth of 35% in credit and 28% in deposits
on a y-o-y basis led to growth in NII of 17% y-o-y to | 571 crore. Financing
segments both bank & Kotak Prime remain major contributors to
consolidated PAT which grew 16% y-o-y and 5% q-o-q to | 383.6 crore.
Strong credit growth to continue with NIM around 5%….
Bank reported 20 bps dip in NIM at 5.4%, however 30 bps of NIM is on
account of the funds raised from Sumitomo in Q2FY11. We expect the bank
to maintain 5% NIM with NII growth of 25% CAGR over FY10-12E. Credit
growth was 35% YoY at | 28885 crore for the bank with CV segment and
agriculture financing growing the largest. Deposits grew slower at 28% YoY
with CASA at 28%. We expect credit and deposits to grow at 29% CAGR
and 25% CAGR respectively over FY10-12E.
Kotak Prime shining with robust profitability
Kotak Prime saw 90% y-o-y surge in profitability at | 93 crore with total
advances up 40% y-o-y and auto segment jumping 36% y-o-y to |10439
crore and | 7948.9 crore respectively. Net NPA in car business has also
improved to 0.23% from 0.27% in Q2FY11.
Subdued performance from other subsidiaries continue
Kotak Securities average daily turnover stood at | 4600 crore for 9mFY11
with market share of 3.7% and generated PAT of | 46.6 crore for Q3FY11
down 9% sequentially. Investment Banking earned profit of |7.6 crore. AMC
reported PAT of |7.3 crore with a sequential dip in AUM to |27600 crore
from |28400 crore. Trend in declining premium also continued both
sequentially and y-o-y.
Valuation
The bank is adequately capitalised at 18.6% to grow at 30% annually and
RoE is sustainable at 15.6%. We expect standalone PAT to grow at 40%
CAGR over FY10-12E. We have reduced target multiples of bank and
securities and valued bank at 2.5x FY12E ABV and K-Sec at 13x FY12E PAT
giving an SOTP target of | 406 with ADD rating on the stock.
India Equity Research Reports, IPO and Stock News
Visit http://indiaer.blogspot.com/ for complete details �� ��
Kotak Mahindra Bank -Banking profitability lower than estimated…
Net Profit at |187.8 crore for standalone bank was lower than estimated
due to higher opex, majorly from 25 years completion add campaigns and
mid year increments. Robust growth of 35% in credit and 28% in deposits
on a y-o-y basis led to growth in NII of 17% y-o-y to | 571 crore. Financing
segments both bank & Kotak Prime remain major contributors to
consolidated PAT which grew 16% y-o-y and 5% q-o-q to | 383.6 crore.
Strong credit growth to continue with NIM around 5%….
Bank reported 20 bps dip in NIM at 5.4%, however 30 bps of NIM is on
account of the funds raised from Sumitomo in Q2FY11. We expect the bank
to maintain 5% NIM with NII growth of 25% CAGR over FY10-12E. Credit
growth was 35% YoY at | 28885 crore for the bank with CV segment and
agriculture financing growing the largest. Deposits grew slower at 28% YoY
with CASA at 28%. We expect credit and deposits to grow at 29% CAGR
and 25% CAGR respectively over FY10-12E.
Kotak Prime shining with robust profitability
Kotak Prime saw 90% y-o-y surge in profitability at | 93 crore with total
advances up 40% y-o-y and auto segment jumping 36% y-o-y to |10439
crore and | 7948.9 crore respectively. Net NPA in car business has also
improved to 0.23% from 0.27% in Q2FY11.
Subdued performance from other subsidiaries continue
Kotak Securities average daily turnover stood at | 4600 crore for 9mFY11
with market share of 3.7% and generated PAT of | 46.6 crore for Q3FY11
down 9% sequentially. Investment Banking earned profit of |7.6 crore. AMC
reported PAT of |7.3 crore with a sequential dip in AUM to |27600 crore
from |28400 crore. Trend in declining premium also continued both
sequentially and y-o-y.
Valuation
The bank is adequately capitalised at 18.6% to grow at 30% annually and
RoE is sustainable at 15.6%. We expect standalone PAT to grow at 40%
CAGR over FY10-12E. We have reduced target multiples of bank and
securities and valued bank at 2.5x FY12E ABV and K-Sec at 13x FY12E PAT
giving an SOTP target of | 406 with ADD rating on the stock.
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