**Kotak Mahindra Bank** – Q3 FY20 (Cons – Un-Audited)
Total Income at 13,542 Cr
11,347 Cr (19.33%) YoY | 12,543 Cr (7.94%) QoQ
9 Months ending at 38,215 Cr Vs. 32,080 Cr (19.14%)
Net Profit of 2,349 Cr
1,844 Cr (27.04%) YoY | 2,407 Crs (-2.41%) QoQ
9 Months ending at 6,688 Cr Vs. 5,166 Cr (29.43%)
EPS (in Rs) 12.28
9.66 YoY | 12.59 QoQ
9 Months ending EPS: 34.97 Vs. 27.06
Gross NPA 5,915 Cr
4,458 Cr YoY | 5,475 Cr QoQ
Net NPA at 2,174 Cr
1,554 Cr YoY 2,032 Cr QoQ
GNPA(%) 2.33 vs 1.89 YoY 2.17 QoQ
NNPA(%) 0.87 vs 0.67 YoY 0.82 QoQ
Return on asset (%) 0.58 Vs 0.50 YoY 0.60 QoQ
View: Result is average and below expectation. Although YoY and QoQ total income increased and profit increased in YoY but QoQ profit down.
**Business Updates & Highlights**:
Net Interest Income (NII) for Q3FY20 increased to INR 3,430 cr from INR 2,926 cr in Q3FY19, up by 17%. Net Interest Margin (NIM) for Q3FY20 at 4.69% up from 4.31% in Q3FY19
CASA ratio as on December 31, 2019 stood at 53.7% compared to 50.7% as on December 31, 2018. TD Sweep deposits as on December 31, 2019 were 7.4% of the total deposits. Cost of SA for Q3FY20 was 5.27%.
Advances as on December 31, 2019 were up 10% to INR 216,774 cr (INR196,432 cr as on December 31, 2018)
Average Savings deposits grew by 20% to INR 83,049 cr for 9MFY20 compared to INR 69,256 cr for 9MFY19. Average Current Account deposits grew by 19% to INR 33,258 cr for 9MFY20 compared to INR 28,026 cr for 9MFY19.
Provisions stood at Rs 444 crore versus a write-back of Rs 32 crore in the corresponding quarter last year. In the quarter ended September, provisions were Rs 408 crore.
PAT and business in following subsidiaries:
Q3FY20 Vs. Q3FY19 (YoY) Vs. Q2FY20 (QoQ)
Kotak Mahindra Bank (standalone) 1,596 Cr Vs. 1,724 Cr Vs. 1,291 Cr
Kotak Mahindra Prime: 187 Cr Vs. 172 Cr Vs. 139 Cr
Kotak Mahindra Investments: 64 Cr Vs. 67 Cr Vs. 40 Cr
Kotak Securities: 128 Cr Vs. 149 Cr Vs. 99 Cr
Kotak Mahindra Capital: 40 Cr Vs. 1 Cr Vs. 3 Cr
Kotak AMC and TC: 91 Cr Vs. 85 Cr Vs. 76 Cr
International business: 26 Cr Vs. 34 Cr Vs. 37 Cr
Kotak Mahindra Life Ins: 166 Cr Vs. 144 Cr Vs. 25 Cr (Gross Written Premium growth 44.0% YoY. Individual Premium growth 29.3% YoY. Group Premium growth 89% YoY. AUM (Policyholders’) as on Dec 31, 2019: INR 32,670 cr, growth of 29.0% YoY.
Asset under management in Dec 2019 is INR 263,000 Cr Vs. 203,222 Cr as of Dec 2018.
**Financial**
ROE and ROCE is around 12% and 8% respectively and book value per share is around INR 240 and share is currently trading at 6.7x of its book value. Bank is currently trading at annualized PE of around 35 which is slightly high as per Industry benchmark. Promoter holding is company is around 30% which is stable. FIIs, mutual fund and Insurance cos hold around 40.1%, 8.8% respectively. Consolidated capital & reserve & surplus of around INR 65,018 Cr Vs. 62,563 Cr as of Q2FY20.
**Share View**: Share price high 1735 (52 week) and now 1625. Kotak Mahindra Group is one of India's leading financial services conglomerates. Kotak Mahindra Group (Group) offers a wide range of financial services that encompass every sphere of life. From commercial banking, to stock broking, mutual funds, life and general insurance and investment banking, the Group caters to the diverse financial needs of individuals and the corporate sector. The premise of Kotak Mahindra Group’s business model is concentrated India, diversified financial service. Kotak Mahindra Group has a global presence through its subsidiaries in UK, USA, Gulf Region, Singapore and Mauritius with offices in London, New York, California, Abu Dhabi, Mauritius and Singapore respectively. As on December 31, 2019, Kotak Mahindra Bank Ltd has a national footprint of 1,539 branches and 2,447 ATMs, and branches in GIFT City and DIFC (Dubai)
Short term outlook is bearish since result was below expectation strong support around INR 1590. Long term investor should continue with the bank as bank has delivered good growth in past few years and highly diversified group.
Disclaimer: Views are shared based on market research and study and personal in nature. Others can take the different view and opinions. Please do the thoroughly study before enter or exit the shares.
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