Kotak Mahindra Bank share price gains over 4% after Q4 results beat estimates. Should you buy, sell or hold the stock?
- Kotak Mahindra Bank reported a standalone profit for the quarter ended March 2024 at ₹4,133.30 crore, a growth of 18.22% year-on-year (YoY), while its net interest income (NII) increased 13% YoY to ₹6,909 crore.
Kotak Mahindra Bank share price gained over 4% in early trade on Monday after the private sector lender reported better than expected Q4 results. Kotak Mahindra Bank shares rallied 4.2% to ₹1,612.30 apiece on the BSE.
Kotak Mahindra Bank reported a standalone profit for the quarter ended March 2024 at ₹4,133.30 crore, a growth of 18.22% year-on-year (YoY), while its net interest income (NII) increased 13% YoY to ₹6,909 crore.
Its net interest margin (NIM) in Q4FY24 rose to 5.28% from 5.22% in Q3FY24.
Analysts have cited risks from the RBI restrictions on Kotak Mahindra Bank, however, they believe the stock valuations after the recent correction have become supportive. Here’s what analysts have to say on Kotak Mahindra Bank Q4 results and Kotak Mahindra Bank share price:
JPMorgan
JPMorgan upgraded Kotak Mahindra Bank to ‘Overweight’ following supportive valuations post recent RBI actions and senior management departure. The impact of the same on FY25/26 growth should be minimal and the bank showed in 4Q print that core operating metrics remain strong, JPMorgan said.
It believes the bank can continue to compound balance sheet at 16% CAGR over next 2 years and even factoring ROA normalization, it thinks bank earnings can compound at 16-17% CAGR over next 2 years with scope for upside driven by better opex control.
Valuations at 10x F26E parent P/E are compelling for what is a high quality and growth compounding franchise, it said. JPMorgan has a target price of ₹2,070 per share on Kotak Mahindra Bank.
Emkay Global Financial Services
Kotak Mahindra Bank reported a huge 28% beat on PAT, mainly on treasury gains/debt syndication fees, reversal of AIF provisions, and lower tax rate, Emkay Global said. It cut FY25E-27E growth estimates by 200 bps and expects the RoA/RoE trajectory to slip to 1.9% - 2.3% / 13% - 14%, on higher opex/provisions.
Higher attrition and Bank’s strategy to reduce provision buffers vs peers amid rising asset-quality noise, adds to our concerns, it said. The brokerage retains ‘Reduce’ rating and cut Kotak Mahindra Bank share price target to ₹1,625 apiece from ₹1,750 earlier.
Also Read: Titan share price falls over 4% after Q4 results; should you buy, sell, or hold the stock?
Phillip Capital
Phillip Capital believes the bank has a big task to perform in terms of gaining regulator’s confidence, attaining scale and keeping the track record of profitable growth across cycles.
It expects growth to remain higher than Industry average despite RBI sanctions. It maintained a ‘Buy’ rating and cut Kotak Mahindra Bank share price target to ₹1,900 from ₹2,100 earlier.
At 9:20 am, Kotak Mahindra Bank shares were trading 3.74% higher at ₹1,605.15 apiece on the BSE.
Disclaimer: The views and recommendations made above are those of individual analysts or broking companies, and not of Mint. We advise investors to check with certified experts before making any investment decisions.
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