Q1FY20 result highlights
Valuation and view
KMB results were better than most other private banks in terms of growth, NIMs and asset quality. Mgmt remains confident of standalone loan growth of 20% and stable asset quality. We believe loan growth remains a key monitorable for Kotak, like for other private banks, given the tough macro with a slowdown in corporate and consumer demand. Kotak has managed its asset quality better than any other bank. So unlike for the rest of the sector, asset quality is not a concern here. We maintain Outperformer. However, we note that given the valuation premium KMB commands over other private banks, a miss on loan growth in the quarters ahead would be viewed negatively.
Kotak Mahindra Bank is principally engaged in commercial banking activities. Co.'s services are provided through branch banking, telephone banking, internet banking, mobile banking, direct pay services, payment gateway for online shopping, a global debit card, a prepaid spending card and facility to transfer of funds to all Visa debit and credit cards in India. As of Mar 31 2007, Co.'s total assets and deposits was IRs286,308,094,000 and IRs96,609,722,000 respectively. In additions, Co. had 105 branches and 135 ATMs in 69 locations throughout India.
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