Motilal Oswal's research report on Kotak Mahindra Bank
KMB reported a robust quarter, with standalone PAT increasing 67% YoY to INR35b (14% beat), driven by higher treasury gains and dividend income of INR3b from subs. Consolidated PAT grew 51% YoY to INR41.5b. Advances grew 17% YoY (3% QoQ) to INR329b, while margin contracted by 18bp QoQ to 5.6%. Deposit growth was steady, though the CASA mix moderated 380bp QoQ due to a shift in SA deposits toward high-yielding ActivMoney product launched by the bank. Gross slippages increased 46% QoQ to INR12b, of which INR2.9b were upgraded in 1QFY24. Higher slippages and healthy recoveries held GNPA/NNPA ratios stable at 1.77%/0.4%.
Outlook
We increase our FY24/FY25 PAT estimates by 7%/5% and revise our TP to INR2,170 (3.0x FY25E BV and INR560 for subs). Maintain Neutral.
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