Most brokerages retain neutral or bearish stance on Kotak Mahindra Bank

MUMBAI: Most brokerages have a neutral or bearish view on after its March quarter profit missed estimates as it set aside a higher amount of money to boost bad loan buffers. The lender on Monday reported a 33 per cent year-on-year rise in net profit to Rs 1,682 crore, missing analysts’ estimates by a wide margin.

Sequentially, the lender’s profit fell on account of a rise in provisions.

Brokerages that retained neutral, underperform or reduce ratings were concerned about valuation and lower earnings.

In addition, brokerages are also concerned on the successor front as tenures of both the managing director and joint managing director will end in January 2024. Ambit retained sell, Elara and HSBC retained reduce, while Nomura and Motilal Oswal retained neutral rating.

Retaining an underperform rating, CLSA said the valuation of Kotak Mahindra Bank does not offer a good risk-reward at 3.3 times FY23 book valuation. CLSA prefers ICICI Bank and Axis Bank over Kotak Mahindra Bank as it has underperformed Axis and ICICI Bank by 25-30% over the past six to 12 months.

Edelweiss, which maintained buy rating, said sustained growth momentum will be key for Kotak Mahindra Bank.