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Capital adequacy ratio of the bank as per Basel III as at June 30, 2021 was 23.1% and Tier I ratio was 22.2%.
Kotak Mahindra Bank Q4 results | Brokerages retained their bullish views on Kotak Mahindra Bank after it posted a 32.82% year-on-year (YoY) growth in net profit at Rs 1,682.37 crore for the quarter ended March 31. It had reported a profit of Rs 1,266.60 crore in the corresponding quarter last year.
The scrip traded 1.94% higher at Rs 1,757.70 at around 10 am (IST). On the other hand, the benchmark BSE Sensex was up 80 points, or 0.17%, at 48,799.
YES Securities has ‘Buy’ on Kotak Mahindra Bank with a price target of Rs 2,005. “Management remains focused on growth in both secured and unsecured retail segments. Considering current product mix, growth caution exercised by the bank before Covid, and resilient asset quality experience of the first wave, we believe that contingency provisioning buffer should be adequate to absorb the impact of second wave,” YES Securities said.
Covid impact
Net interest income (NII) of the lender grew 7.95% YoY to Rs 3,843 crore. Provision and contingencies spiked to Rs 1,682 crore, up 32.75%, against Rs 1,267 crore in the same period last year. No fresh Covid-related provisions were created by the bank during the quarter under review. However, the figure stood at Rs 1,279 crore for the financial year ended March 31, 2021.
LKP Securities is also bullish on the private bank with a price target of Rs 1,900. It expects the bank’s loan book to grow at a CAGR of around 10% over FY21-23E. On the other hand, Motilal Oswal has a ‘Neutral’ rating on the bank with a price target of Rs 1,900.
“Asset quality remains broadly stable QoQ but deteriorated compared to pre-pandemic levels. Kotak Mahindra Bank reported a miss on our expectations as PAT stood at Rs 1,680 crore (14% below our estimate), affected by lower net interest income (NII) and higher provisions. Loan book grew 4.5% QoQ led by steady traction in home loans, CV/CE, and the agribusiness,” Motilal Oswal Financial Services said.