Kotak Mahindra Bank - Stronger as Expected
Monday, October 29, 2007
Kotak Mahindra Bank stunned analysts on the street with results recording a PAT growth of 147% YoY. Broking profits up 215%+ (100% yoy rise - slight market share gains), and investment banking profits up 218%; and high league table positions. Buoyant primary/secondary markets key drivers;Asset management group now manages almost $10b in assets - across domestic MF, portfolio management - domestic and offshore, and the more recent, alternative asset class. Key growth area - fees, potential performance fees upsides, business generating synergies and value generator. The core banking business to grow rapidly, and without any fuss; 50% loan growth, margins stable at 5%+.
Consensus EPS estimate is now at Rs 24.35 and Rs 29.82 for FY08 and FY09 respectively. Citi puts a price target of Rs 1110 based on EVA methodology. Macquarie research set a target price of Rs 1150.
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