Kotak Mahindra Bank’s shares surge 4% on Q1FY20 results

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Published: July 23, 2019 6:45:30 PM

Shares of private lender Kotak Mahindra Bank surged nearly 4 per cent after it posted stellar quarterly results. Today, on BSE the shares of Kotak Mahindra ended higher at Rs 1,493.70 per share, nearly 3 per cent higher than the previous close.

Kotak Mahindra shares surged nearly 4 per cent on Tuesday after the bank reported stellar quarterly results

Shares of private lender Kotak Mahindra Bank surged nearly 4 per cent after it posted stellar quarterly results. Today, on BSE the shares of Kotak Mahindra ended higher at Rs 1,493.70 per share, nearly 3 per cent higher than the previous close. The shares of private lender had opened higher at Rs 1,511.75 per share in the morning.  Kotak Mahindra on Monday posted 32.71 per cent rise in its standalone profits year-on-year. The provisions and contingencies of the bank declined by 32.55 per cent year-on-year to Rs 316.76 crore during Apr-Jun. 

Net interest income (NII) of Kotak Mahindra grew 23% year-on-year in Q1FY19 to Rs 3,173 crores. Net interest margin (NIM) improved 21 basis points (bps) year-on-year and one basis point to 4.49% on a sequential basis.Gross NPAs stood at 2.19% of total loans as compared with 2.14% in the last quarter and 2.17% in the corresponding quarter a year ago. In Apr-Jun net NPAs stood at 0.73% as against 0.75% in the last quarter, and 0.86% in the same quarter of previous year. Gross non-performing asset increased 18.31 per cent to Rs 4,613.52 crore during Apr-Jun. The bank’s deposits grew 22.76% to Rs 2.33 trillion, while advances rose 18 per cent to Rs 2.08 trillion.

Motilal Oswal Financial Services has maintained a Neutral stance on the Kotak Mahindra stock with a target price of Rs 1,400. The bank’s operating performance remains strong, although business growth has shown moderation, reflecting the weakness in the consumption-linked lending segments and the cautious stance on corporate/BB and certain segments of Agri. “We expect the bank to deliver 23% PAT CAGR over FY19-21, led by stable/improving margins and a further improvement in operating leverage. We estimate FY21 consol. RoA/RoE at 2.2%/13.4%. We continue believing in KMB’s capability to deliver in a challenging environment and appreciate the progress the bank is making in building a strong liability franchise,” Motilal Oswal said in a report. 

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