EUR 120.00 For Business Accounts Only

MOSL: Morning India (22/January/19): 1. Kotak Mahindra Bank (Loan growth accelerates further); 2. Hindustan Zinc (In-line); 3. L&T Fin. Holdings (Performance encouraging); 4. Coromandel Intl; 5. MRPL; 6. Zensar

MOrning India (22/January/19): 1. Kotak Mahindra Bank (Loan growth accelerates further); 2. Hindustan Zinc (In-line); 3. L&T Fin. Holdings (Performance encouraging); 4. Coromandel Intl; 5. MRPL (Upgrade to Buy); 6. Zensar Tech; 7. South Indian Bank; 8. Metals Weekly

 

Today’s top research idea

Kotak Mahindra Bank: Loan growth accelerates further, margin cycle set to reverse

• KMB has been reporting strong traction in loan growth, even as it is consciously not growing the business banking segment. Healthy capitalization (tier1 of 17.6%) places the bank in a sweet spot to capitalize on growth opportunities and consistently gain market share.
• We expect loan CAGR of 23% over FY19-21 on the back of higher refinancing opportunities, increased pricing power, healthy customer acquisition run-rate and cross-sell to existing customers. Further, the bank has maintained stable asset quality in a challenging environment and is on track to build a formidable liability franchise. The capital market, securities and asset management businesses can provide further upside to earnings as the business cycle improves.
• We estimate consol. earnings CAGR of 20% over FY18-21. Maintain Neutral with a revised TP of INR1,350 (3.8x Sep’20E ABV for the lending business).

Piping hot news

IMF forecasts India’s growth will improve to 7.5% in the next fiscal

• India will grow at a world-beating 7.5% in 2019-20 amid slower global expansion, the International Monetary Fund (IMF) said, upgrading its October forecast of 7.4%. “India’s economy is poised to pick up in 2019, benefiting from lower oil prices and a slower pace of monetary tightening than previously expected, as inflation pressures ease," IMF said in an update to its biannual World Economic Outlook (WEO) on Monday.