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1/44
Kotak Mahindra Bank (KMB)
30 Mar 2016
Darpin Shah
+91-22-6171-7328
Siji Philip
+91-22-6171-7324
Parul Gulati
+91-22-6639-3035
All virtue, no vice!
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2
KOTAK MAHINDRA BANK : INITIATING COVERAGE
Kotak Mahindra Bank (KMB) Structure
Kotak Mahindra Bank (KMB)
Rs 595 / share (80% of SOTP)
KotakMahindra
Prime (KMP)
Auto Finance
Rs 77/share
(10% of SOTP)
KotakMahindra
Investments(KMI)
Loan AgainstShares
Rs 12/share
(1.6% of SOTP)
Kotak
Securities
(K-sec)Broking
Rs 21/share
(2.9% ofSOTP)
KotakMahindra
AssetManagement
(K-AMC)
AssetManagement
Rs 15/share(2.1% ofSOTP)
Kotak
MahindraCapitalCompany(KMCC)
Investment
Banking
Re 1/share(0.2% ofSOTP)
Kotak
InvestmentAdvisors
Offshore & Alternate
Investments
Rs 9/share(1.1% ofSOTP)
KM OldMutual LifeInsurance
Life Insurance
Rs 16/share(2.2% ofSOTP)
Sub’s value post 20% holding co. discount
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3
KOTAK MAHINDRA BANK : INITIATING COVERAGE
All virtue, no vice!
Kotak Mahindra Bank encapsulates most of the virtues
that should characterise a high quality Indian bank. Itscore lending business has sustainably high spreads,
durable fee streams and tightly controlled asset quality
on a strategically constructed loan mix.
A market leading (and synergistic) securities and
investment banking practice align it well with cyclical
tailwinds. Asset management and insurance businesses
look surprisingly small (given the evolution in other
verticals) but are now well positioned to outpace
system growth. The bank is well capitalised at 16%
(with Tier I at 15%).
Valuations are expectedly high at 3.6x standalone
FY18E ABV, adjusted for subs at 20% holdco discount.
Our SoTP of Rs 747 assigns 4.0x to standalone FY18E
ABV and lower multiples of 3.5/2.5x to the auto-
finance/LAS verticals. We initiate coverage with a BUY.
To us, KMB represents a high-quality and broad-based
play on Indian financial services, not just banks.
• A consciously low exposure to stressed sectors (8.5%, lowest
among peers), granular book and focus on working capital
advances (rather than term loans or project finance) have
helped keep a tight leash on asset quality.
• After the acquisition of e-VYSB, KMB created a ‘bad bank’, with
total funded and non-funded exposures of ~6%, i.e. Rs 25bn,
(2.5% for the merged entity). The cross-sell, product
diversification and cost benefits of the merger with e-VYSB are
now set to accrue. We expect significant improvement in cost
efficiency and branch productivity (parameters where Kotak
currently lags peers, esp post-merger). This improvement is
premised on a widening of the retail product mix, increase in
fee incomes, trimming of redundant costs and manpower and
operating leverage.
•On the liability side, retail franchise, SA accretion and urbanvisibility are running high with Kotak offering differential
savings rates (like IIB and YES).
Private Banks : PABV vs. RoAA
AXSB
CUBDCB
FB
ICICIB
IIB
KMB
0.5
1.0
1.5
2.0
2.5
3.0
3.5
0.7 0.8 0.9 1.0 1.1 1.2 1.3 1.4 1.5 1.6 1.7 1.8 1.9 2.0
ROA (FY18E)
P/ABV (FY18E)
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KOTAK MAHINDRA BANK : INITIATING COVERAGE
SOTP
Rs bn Per Share Rationale
Kotak Mahindra Bank - Standalone 1,090.9 595.3 4x FY18E core ABV of Rs 149
Kotak Mahindra Prime - Car Finance 176.9 96.5 3.5x FY18E core NW
Kotak Mahindra Investments - LAS 28.1 15.4 2.5x FY18E core NW
Kotak Securities - Broking 49.2 26.8 15x FY18E Earnings
Kotak Mahindra AMC - Asset Management 35.3 19.3 5% of FY18E AUM
Kotak Life - Life Insurance 36.8 20.1 23% APE CAGR FY16-18E; NBAP Margin at 16%.
KMCC - Investment Banking 2.6 1.4 1x FY18E core NW
Kotak Alternative Assets 4.9 2.7 7.5% of FY18E AUM
Offshore Funds 14.6 8.0 5% of FY18E AUM
Total Value of Subsidiaries 348.3 190.1
Less : 20% Holding Discount 69.7 38.0
Total SOTP Value 1,369.6 747.4
Current Value 1254.5 684.6
Upside (%) 9.2 9.2
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KOTAK MAHINDRA BANK : INITIATING COVERAGE
Contents
Lending Business : Kotak Mahindra Bank (KMB) : At A Glance …………….…………………………………………….………….…6
Advances: Granular, diversified and well-picked …….….…………………………………..………………………………………………..……………………………..7 Liability franchise: CASA strength to increase ……………..……………………………………..………………………………………..…………………………………..9
Margins to remain healthy ……………………………………………..…………………………………….………………………………………………………………………..12
Cost efficiencies: Room for improvement …………………………..………………………………….……………………………………………………………………….13
Branch productivity …………………………………………..…………………………………………………….……………………………………………………………………..14
Non Interest Income ………………………………………………………………………………………………….………………………………………………………………..…15
Asset Quality : ultra conservative approach ……………………………………….…………………………………………………………………………………………..16
Merger with VYSB …………………………………………………………………………………….……………….…………………………..……………………………………….18
Five Quarters At A Glance ………………………………………………………………………………………….………………………..………………………………………….21
Snapshot ……………………………………………………………………………………………………….……….………………………………..…………………………………….22
Standalone Financials …………………………………………………………………………………….…………….…………………………..…………………………………...23
Peer valuation …………………………………………………………………………………………….………………………………………………………………………………....25
Lending Business : Kotak Mahindra Prime: At A Glance …………………………………..…………………………………………… ..26
Car finance ……………………………………………………………………………………………………….……….…………………………………………………………………...27
Industry leading auto financier ………………………………………………………………………….………….……………………………………………………………....28
Financials …………………………………………………………………………………………………………….…………….………………………………………………………..…29
Lending Business: Kotak Mahindra Investments : At A Glance ……………………………….………………………………..…….30
LAS business ……………………………………………………………………………………………………….……………….…………………………………………………..……31
Financials …………………………………………………………………………………………………………….………………….…………………………………………………..…32
Capital Market Business: Kotal Securities : At A Glance ………………………………………….……………….……………….…….33
K sec …………………………………………………………………………………………………………………….…………………….………………………………………………….34 Financials ……………………………………………………………………………………………………………….……………………….…………………………………………..…35
Capital Market Business: Kotak Asset Management Company : At A Glance …………….…………………………….…….36
KAMC …………………………………………………………………………………………………………………….……………………………..……………………………………..…37
Financials ……………………………………………………………………………………………………………….………………………………………………………………………38
Capital Market Business - Kotak Mahindra Capital Co: At A Glance …………………………….…………………….…………..39
KMCC …………………………………………………………………………………………………………………………….….…………………………………………………………...40
Insurance Business - Kotak Life Insurance Co : At A Glance ………………………………………………….…………….…………. 41
K-Life ………………………………………………………………………………..………………………………………………….……………………………………………..………….42
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6
KOTAK MAHINDRA BANK : INITIATING COVERAGE
Lending Business : Kotak Mahindra Bank
Kotak Mahindra Bank (KMB)
Total Assets
Rs 1,821bn
Total Loans
Rs 1,153bn
Total Deposits
Rs 1,309bn
Total CASA
Rs 462bn
Net Impaired Assets (%)
1.26%
RoAA(%)
1.4%
CRAR /Tier I(%)
16.2/15%
Data as of Dec-15
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KOTAK MAHINDRA BANK : INITIATING COVERAGE
Advances: Granular, diversified and well-picked
Kotak Mahindra Bank (KMB) has a well-diversified loan book
(Rs 1.15trn) with a tilt towards granular segments like retail,
agri and SME (~69% of loans as of Dec-15). The bank has a
presence in several high-yielding segments like self-employed
non-professional (SENP), tractors, cars, etc.
Mortgages form ~19% of the retail loans, while PL and CV/CE
are ~8% and 6%, respectively.
Acquiring e-VYSB in 2QFY15 contributed significantly to KMB’s
SME/business banking portfolio, which now stands at ~20% of
loans (vs.
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8
KOTAK MAHINDRA BANK : INITIATING COVERAGE
Advances: Growth unchallenged
Consol Loan Book
Consol Composition
Source: Bank, HDFC sec Inst Research; Data from 1QFY16 onwards includes the e-VYSB merger effect.
Standalone Composition
Standalone Loan Book
0%
20%
40%
60%
80%
100%
1 Q F Y 1 3
2 Q F Y 1 3
3 Q F Y 1 3
4 Q F Y 1 3
1 Q F Y 1 4
2 Q F Y 1 4
3 Q F Y 1 4
4 Q F Y 1 4
1 Q F Y 1 5
2 Q F Y 1 5
3 Q F Y 1 5
4 Q F Y 1 5
1 Q F Y 1 6
2 Q F Y 1 6
3 Q F Y 1 6
CV and CE Agri Finance Mortgage Loans
PL Business Banking Corp Banking
0%
20%
40%
60%
80%
100%
1 Q F Y 1 3
2 Q F Y 1 3
3 Q F Y 1 3
4 Q F Y 1 3
1 Q F Y 1 4
2 Q F Y 1 4
3 Q F Y 1 4
4 Q F Y 1 4
1 Q F Y 1 5
2 Q F Y 1 5
3 Q F Y 1 5
4 Q F Y 1 5
1 Q F Y 1 6
2 Q F Y 1 6
3 Q F Y 1 6
CV and CE Agri Finance Auto loans
Mortgage loans PL Business Banking
Corp Banking Others
4 2 3
4 5 4
5 0 2
4 8 5
5 0 5
5 0 6
5 3 1
5 3 0
5 6 9
6 0 9
6 4 6
6 6 2 1
, 0 3 6
1 , 1 1 7
1 , 1 5 3
2 9 3
3 0 0
3 1 6
3 1 8
3 3 0
3 2 9
3 4 0
3 5 8
3 8 2
3 9 6
4 0 6
4 0 6
- -
-
5.0
10.0
15.0
20.0
25.0
30.0
35.0
-
200
400
600
800
1,000
1,200
1,400
1 Q F Y 1 3
2 Q F Y 1 3
3 Q F Y 1 3
4 Q F Y 1 3
1 Q F Y 1 4
2 Q F Y 1 4
3 Q F Y 1 4
4 Q F Y 1 4
1 Q F Y 1 5
2 Q F Y 1 5
3 Q F Y 1 5
4 Q F Y 1 5
1 Q F Y 1 6
2 Q F Y 1 6
3 Q F Y 1 6
KMB VYSB YoY (%) - RHSRs bn
5 7 0
6 1 3
6 7 0
6 6 3
6 8 4
6 8 2
7 1 0
7 1 7
7 7 1
8 1 4
8 6 1
8 8 6 1
2 5 5
1 3 4 7
1 4 1 1
2 9 3
3 0 0
3 1 6
3 1 8
3 3 0
3 2 9
3 4 0
3 5 8
3 8 2
3 9 6
4 0 6
4 0 6
-
5.0
10.0
15.0
20.0
25.0
30.0
0
200
400
600
800
1000
1200
1400
1600
1 Q F Y 1 3
2 Q F Y 1 3
3 Q F Y 1 3
4 Q F Y 1 3
1 Q F Y 1 4
2 Q F Y 1 4
3 Q F Y 1 4
4 Q F Y 1 4
1 Q F Y 1 5
2 Q F Y 1 5
3 Q F Y 1 5
4 Q F Y 1 5
1 Q F Y 1 6
2 Q F Y 1 6
3 Q F Y 1 6
KMB VYSB YoY (%) - RHSRs bn
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9
KOTAK MAHINDRA BANK : INITIATING COVERAGE
Consolidated aggregate (funded + non funded) exposure
Source: Bank, HDFC sec Inst Research
(%) 1QFY15 2QFY15 3QFY15 4QFY15 1QFY16 2QFY16 3QFY16
Auto Loans 23.9 23.1 22.0 21.9 15.0 14.4 16.1
Personal Loans 4.0 4.2 4.4 4.4 3.6 3.6 3.7
HL/LAP 13.9 13.7 13.7 14.0 13.2 12.8 12.4
Credit cards 0.6 0.5 0.6 0.6 0.4 0.4 0.5
Other retail 7.6 5.8 7.5 9.4 17.2 11.7 1.7
Total Retail 50.0 47.3 48.1 50.3 49.4 42.9 34.4
Commercial Real Estate - - - - - 4.3 4.7
Engineering 3.6 3.8 3.8 2.9 3.7 3.9 4.0
Automobiles 4.5 5.0 4.5 5.0 4.1 3.5 4.0
NBFCs 4.0 3.6 3.9 3.2 3.4 3.5 3.7
Telecom - 1.5 1.4 3.3 3.0 2.6 2.6
Iron and steel 1.5 1.6 2.2 2.5 3.0 2.4 2.2
Drugs and Pharmaceuticals - 2.0 1.8 2.3 1.7 1.5 2.2
Chemical, dyes, paints etc 5.2 2.5 2.4 3.0 2.2 2.2 1.9
Other Infrastructure 9.4 2.8 4.0 7.5 2.5 2.2 1.5
Power - 2.8 2.4 2.0 1.7 1.5 1.5
Construction 5.9 9.5 8.8 7.9 6.1 1.6 1.4
Fertilisers - 0.9 0.7 0.8 0.8 0.8 1.0
Roads and Ports - 0.4 0.4 0.3 0.4 0.6 0.6
Other industries 16.0 16.5 15.6 9.1 18.2 26.6 34.1
Total 100.0 100.0 100.0 100.0 100.0 100.0 100.0
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10
KOTAK MAHINDRA BANK : INITIATING COVERAGE
Liability franchise: CASA strength to increase
After the liberalisation of savings interest rates, KMB was one of
the few private banks to offer differential interest rates. It offers6% on deposits above Rs 1 lakh and 5% below
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11
KOTAK MAHINDRA BANK : INITIATING COVERAGE
Liability franchise
CASA : Quarterly trend
SA Growth Vs. Peers
Source: Bank, HDFC sec Inst Research
Deposits Break-up
CASA (%) Vs. Peers
Source: Bank, HDFC sec Inst Research
1 6
1 6
1 6 1
9
1 3
1 4
1 3
1 5
1 3
1 3
1 3
1 5
1 3
1 4
1 5 1
8 1 5
1 6
1 5
1 1
1 0 1
2 1 3
1 3 1
3 1 3
1 4
1 5
1 6
1 7 1
7 1 8
1 7
1 7 1
9 1 9 2
0 2 0
6 6
6 8
6 6 6
1
7 3 6
6 6 7
7 1
7 1
7 1
7 0
6 8
6 9
6 9
6 8 6
4 6 6
6 4
6 5
1 Q F Y 1 2
2 Q F Y 1 2
3 Q F Y 1 2
4 Q F Y 1 2
1 Q F Y 1 3
2 Q F Y 1 3
3 Q F Y 1 3
4 Q F Y 1 3
1 Q F Y 1 4
2 Q F Y 1 4
3 Q F Y 1 4
4 Q F Y 1 4
1 Q F Y 1 5
2 Q F Y 1 5
3 Q F Y 1 5
4 Q F Y 1 5
1 Q F Y 1 6
2 Q F Y 1 6
3 Q F Y 1 6
CA SA TD%
1 1 1
1 2 3
1 3 4
1 4 9
1 5 1
1 5 4
1 6 3
1 8 8
1 9 0
2 1 2
2 3 1
2 7 2
4 0 1
4 4 7
4 6 2
1 1 9
1 1 9
1 1 9 1
3 4
1 2 3
1 3 0
1 3 5 1
3 8
1 2 6 1
4 8
1 4 6 1
4 6
-
10.0
20.0
30.0
40.0
50.0
-
100
200
300
400
500
1 Q F Y 1 3
2 Q F Y 1 3
3 Q F Y 1 3
4 Q F Y 1 3
1 Q F Y 1 4
2 Q F Y 1 4
3 Q F Y 1 4
4 Q F Y 1 4
1 Q F Y 1 5
2 Q F Y 1 5
3 Q F Y 1 5
4 Q F Y 1 5
1 Q F Y 1 6
2 Q F Y 1 6
3 Q F Y 1 6
KMB VYSB YoY (%) - RHSRs bn
10.0
20.0
30.0
40.0
50.0
1 Q F Y 1 3
2 Q F Y 1 3
3 Q F Y 1 3
4 Q F Y 1 3
1 Q F Y 1 4
2 Q F Y 1 4
3 Q F Y 1 4
4 Q F Y 1 4
1 Q F Y 1 5
2 Q F Y 1 5
3 Q F Y 1 5
4 Q F Y 1 5
1 Q F Y 1 6
2 Q F Y 1 6
3 Q F Y 1 6
KMB HDFCB IIB AXSB ICICIBC YES
YES
AXSB
ICICIBC
HDFCB
KMB
IIB
-
20.0
40.0
60.0
80.0
100.0
120.0
140.0
1 Q F Y 1 4
2 Q F Y 1 4
3 Q F Y 1 4
4 Q F Y 1 4
1 Q F Y 1 5
2 Q F Y 1 5
3 Q F Y 1 5
4 Q F Y 1 5
1 Q F Y 1 6
2 Q F Y 1 6
3 Q F Y 1 6
KMB HDFCB IIB AXSB ICICIBC YES
YES
KMB
IIB
ICICIBC
AXSB
HDFCB
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12
KOTAK MAHINDRA BANK : INITIATING COVERAGE
Margins to remain healthy
KMB enjoys one of the highest NIMs (4.3%) in the industry,
driven by a steady rise in CASA proportion, diversified and
superior asset mix, and ~36% of the book being fixed in nature.
High capital adequacy also helps. The bank’s focus is on self-
employed non-professional (SENP) customers to generate
higher yields vs. peers.
Despite similar CASA proportion, e-VYSB’s NIM was in the 3.5-
3.7% range. Hence, post the merger, KMB’s NIM dropped ~60-
70bps to ~4.2% — still the best in the industry.
With the continued SA momentum, focus on high-yielding SENP
customers, increasing proportion of CV/CE business (
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13
KOTAK MAHINDRA BANK : INITIATING COVERAGE
Cost efficiencies: Room for improvement
KMB’s cost efficiency ratios are below par because of (1) Lower
productivity per branch, (2) Lower non-interest incomecontribution (% of total income and average assets), and (3)
Relatively higher cost structure despite superior NIM.
KMB’s productivity (per branch) is lower than its private peers.
The loan/branch is ~21% lower than AXSB/YES and ~13% vs.
HDFCB (retail-oriented bank). Its SA/branch, too, is at the lower
end of the spectrum (Rs 200mn) vs. peers (Rs 240-330mn).
Non-interest income contribution at ~29% of total income and
~1.6% of avg. assets is lower than private players (~1.7-2.7%). KMB’s cost structures are relatively higher. The in-house legal
team and the VYSB acquisition have pushed the bank’s staff
cost/branch to Rs 4.8mn vs. private peers, who spend about Rs
2.7-3.3mn/branch. Thus, the bank’s cost efficiency ratios are
below par, with C-I ratio and C-AA at ~52% and 2.9%,
respectively, vs. 32-47% and 1.8-2.5% (except IIB at 3%) for
peers.
We believe improving productivity (more product offeringsacross geographies), higher cross sell and contained opex (led
by merger synergies) will drive operational/cost efficiency. The
management is confident of achieving C-I ratio of
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14
KOTAK MAHINDRA BANK : INITIATING COVERAGE
Branch productivity : room for improvement
Deposits / branch :
CASA / branch :
Source: Banks, HDFC sec Inst Research
Loans / branch :
C-AA assets (%)
Source: Banks, HDFC sec Inst Research
1.3
1.8
2.3
2.8
3.3
3.8
4.3
4.8
5.3
1 Q F Y 1 3
2 Q F Y 1 3
3 Q F Y 1 3
4 Q F Y 1 3
1 Q F Y 1 4
2 Q F Y 1 4
3 Q F Y 1 4
4 Q F Y 1 4
1 Q F Y 1 5
2 Q F Y 1 5
3 Q F Y 1 5
4 Q F Y 1 5
1 Q F Y 1 6
2 Q F Y 1 6
3 Q F Y 1 6
KMB HDFCB IIB AXSB ICICIBC YES
ICICIBC
KMB
IIBHDFCB
AXSB
YES 600
800
1,000
1,200
1,400
1,600
1 Q F Y 1 3
2 Q F Y 1 3
3 Q F Y 1 3
4 Q F Y 1 3
1 Q F Y 1 4
2 Q F Y 1 4
3 Q F Y 1 4
4 Q F Y 1 4
1 Q F Y 1 5
2 Q F Y 1 5
3 Q F Y 1 5
4 Q F Y 1 5
1 Q F Y 1 6
2 Q F Y 1 6
3 Q F Y 1 6
KMB HDFCB IIB AXSB ICICIBC YESRs mn
YES
ICICIBC
KMB
IIB
AXSB
HDFCB
600
800
1,000
1,200
1,400
1 Q F Y 1 3
2 Q F Y 1 3
3 Q F Y 1 3
4 Q F Y 1 3
1 Q F Y 1 4
2 Q F Y 1 4
3 Q F Y 1 4
4 Q F Y 1 4
1 Q F Y 1 5
2 Q F Y 1 5
3 Q F Y 1 5
4 Q F Y 1 5
1 Q F Y 1 6
2 Q F Y 1 6
3 Q F Y 1 6
KMB HDFCB IIB AXSB ICICIBC YESRs mn
YESKMB
HDFCB
IIB
ICICIBC
AXSB
100
200
300
400
500
600
700
1 Q F Y 1 3
2 Q F Y 1 3
3 Q F Y 1 3
4 Q F Y 1 3
1 Q F Y 1 4
2 Q F Y 1 4
3 Q F Y 1 4
4 Q F Y 1 4
1 Q F Y 1 5
2 Q F Y 1 5
3 Q F Y 1 5
4 Q F Y 1 5
1 Q F Y 1 6
2 Q F Y 1 6
3 Q F Y 1 6
KMB HDFCB IIB AXSB ICICIBC YESRs mn
YES
AXSB
HDFCB
ICICIBC
IIB
KMB
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15
KOTAK MAHINDRA BANK : INITIATING COVERAGE
Non Interest Income
Fee Income : Growth and % of Loans
Non Interest Income % of Avg. Assets
Source: Banks, HDFC sec Inst Research
Non Interest Income % of Total Income
Non Interest Income : Quarterly Trend
Source: Banks, HDFC sec Inst Research
(20.0)
-
20.0
40.0
60.0
80.0
100.0
120.0
-
1.0
2.0
3.0
4.0
5.0
6.0
7.0
8.0
1 Q F Y 1 3
2 Q F Y 1 3
3 Q F Y 1 3
4 Q F Y 1 3
1 Q F Y 1 4
2 Q F Y 1 4
3 Q F Y 1 4
4 Q F Y 1 4
1 Q F Y 1 5
2 Q F Y 1 5
3 Q F Y 1 5
4 Q F Y 1 5
1 Q F Y 1 6
2 Q F Y 1 6
3 Q F Y 1 6
Non int. income (Rs bn) YoY (RHS %)
-
0.5
1.0
1.5
2.0
2.5
0
1
2
3
4
5
1 Q F Y 1 3
2 Q F Y 1 3
3 Q F Y 1 3
4 Q F Y 1 3
1 Q F Y 1 4
2 Q F Y 1 4
3 Q F Y 1 4
4 Q F Y 1 4
1 Q F Y 1 5
2 Q F Y 1 5
3 Q F Y 1 5
4 Q F Y 1 5
1 Q F Y 1 6
2 Q F Y 1 6
3 Q F Y 1 6
Fee income (Rs bn) % of loans (RHS)
15.0
20.0
25.0
30.0
35.040.0
45.0
50.0
1 Q F Y 1 3
2 Q F Y 1 3
3 Q F Y 1 3
4 Q F Y 1 3
1 Q F Y 1 4
2 Q F Y 1 4
3 Q F Y 1 4
4 Q F Y 1 4
1 Q F Y 1 5
2 Q F Y 1 5
3 Q F Y 1 5
4 Q F Y 1 5
1 Q F Y 1 6
2 Q F Y 1 6
3 Q F Y 1 6
KMB HDFCB IIB AXSB ICICIBC YES%
KMB
HDFCB
ICICIBC
YES
IIB
AXSB
1.3
1.5
1.7
1.9
2.1
2.3
2.5
2.7
2.9
1 Q F Y 1 3
2 Q F Y 1 3
3 Q F Y 1 3
4 Q F Y 1 3
1 Q F Y 1 4
2 Q F Y 1 4
3 Q F Y 1 4
4 Q F Y 1 4
1 Q F Y 1 5
2 Q F Y 1 5
3 Q F Y 1 5
4 Q F Y 1 5
1 Q F Y 1 6
2 Q F Y 1 6
3 Q F Y 1 6
KMB HDFCB IIB AXSB ICICIBC YES%
IIB
ICICIBC
YES
KMB
HDFCB
AXIS
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KOTAK MAHINDRA BANK : INITIATING COVERAGE
Asset Quality : ultra conservative approach
Only a handful of banks (mostly private banks with retail
lending tilt) have been able to weather India’s macro
slowdown, sharp decline in commodity prices and the RBI AQR
to come out reasonably unscathed on asset quality.
KMB’s asset quality remains relatively healthy, led by a
diversified loan book which focuses on granular
retail/SME/agri loans. The lower exposures to stressed
segments and predominance of short-term working capital
loans in the lending mix has also helped.
KMB’s marginally higher net impaired assets at 1.3% (NNPA 1%
+ restructured book 0.3%) can be attributed to the VYSB
acquisition and the buyout of stressed loans.
Unlike its peers, KMB has not utilised the additional
regulatory forbearance like ARC sale, flexible 5:25
restructuring and SDR.
After e-VYSB’s acquisition, KMB created a ‘bad bank’, with
total funded and non-funded exposures of ~6%, i.e. Rs 25bn,
(2.5% for the merged entity). The bad bank includes NPAs,restructured assets, sale to ARC and standard stressed assets
largely from the corporate segment.
Asset quality at KMB’s subsidiaries is at comfortable levels. As
of Dec-15, KMP’s (car finance) NNPAs were 0.4%, while the
LAS business (Kotak Mahindra Investments) had NNPAs of
0.06% only.
At a consolidated level, GNPAs stood at Rs 28.7bn, i.e. 2.01%,
and NNPAs at Rs 12bn, i.e. 0.85%.
We expect KMB’s asset quality to remain flawless over the
FY16-18E period, given the lower exposure to stressed
sectors and cautious lending in the corporate sector. We
expect GNPAs of ~2% by FY18E after factoring in avg.
slippages of 1.05% and credit cost of 0.5%. For KMP, we have
conservatively factored in GNPAs of 0.77% by FY18.
Asset Quality : gradual improvement expected
Source: Bank, HDFC sec Inst Research
-
0.5
1.0
1.5
2.0
2.5
-
5.0
10.0
15.0
20.0
25.0
30.0
35.0
FY12 FY13 FY14 FY15 FY16E FY17E FY18E
GNPA (Rs bn; LHS) NNPA (Rs bn; LHS) GNPA (%) NNPA (%)
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KOTAK MAHINDRA BANK : INITIATING COVERAGE
Asset Quality
Consol Asset Quality : Subsidiaries performing well
Peer comparison : Impaired assets (%)
Source: Banks, HDFC sec Inst Research
Standalone Asset Quality : recent spike led by the merger
Subsidiaries NNPA : near flawless
-
0.5
1.0
1.5
2.0
2.5
-
5.0
10.0
15.0
20.0
25.0
30.0
1 Q F Y 1 3
2 Q F Y 1 3
3 Q F Y 1 3
4 Q F Y 1 3
1 Q F Y 1 4
2 Q F Y 1 4
3 Q F Y 1 4
4 Q F Y 1 4
1 Q F Y 1 5
2 Q F Y 1 5
3 Q F Y 1 5
4 Q F Y 1 5
1 Q F Y 1 6
2 Q F Y 1 6
3 Q F Y 1 6
GNPA (LHS) NNPA (LHS) GNPA (%) NNPA (%)Rs bn %
-
0.5
1.0
1.5
2.0
2.5
-
5.0
10.0
15.0
20.0
25.0
30.0
35.0
1 Q F Y 1 3
2 Q F Y 1 3
3 Q F Y 1 3
4 Q F Y 1 3
1 Q F Y 1 4
2 Q F Y 1 4
3 Q F Y 1 4
4 Q F Y 1 4
1 Q F Y 1 5
2 Q F Y 1 5
3 Q F Y 1 5
4 Q F Y 1 5
1 Q F Y 1 6
2 Q F Y 1 6
3 Q F Y 1 6
GNPA (LHS) NNPA (LHS) GNPA (%) NNPA (%)Rs bn %
-
0.5
1.0
1.5
2.0
2.5
1 Q F Y 1 4
2 Q F Y 1 4
3 Q F Y 1 4
4 Q F Y 1 4
1 Q F Y 1 5
2 Q F Y 1 5
3 Q F Y 1 5
4 Q F Y 1 5
1 Q F Y 1 6
2 Q F Y 1 6
3 Q F Y 1 6
KMP KMI%
-
1.0
2.0
3.0
4.0
5.0
6.0
1 Q F Y 1 3
2 Q F Y 1 3
3 Q F Y 1 3
4 Q F Y 1 3
1 Q F Y 1 4
2 Q F Y 1 4
3 Q F Y 1 4
4 Q F Y 1 4
1 Q F Y 1 5
2 Q F Y 1 5
3 Q F Y 1 5
4 Q F Y 1 5
1 Q F Y 1 6
2 Q F Y 1 6
3 Q F Y 1 6
KMB HDFCB IIB AXSB ICICIBC YES%
HDFCB
IIB
YES
ICICIBC
AXSB
KMB
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KOTAK MAHINDRA BANK : INITIATING COVERAGE
Merger with VYSB
KMB acquired VYSB via a merger in 2QFY15. The share swap ratio
was 0.725 shares of KMB for every share of VYSB, effectivelyvaluing VYSB at Rs 160bn as at Nov-14.
The merger led to :
Increase in branch network from 641 to 1,214 (fourth largest
amongst private banks in the country) with no major overlap
and deepening presence in the south, where VYSB has a strong
foothold.
Increase in loan book to Rs 1,210bn (from Rs 814bn), with
diversification across segments. The bank benefitted fromaccess to VYSB’s traditionally strong of SME lending franchise
(38% of loans vs.
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KOTAK MAHINDRA BANK : INITIATING COVERAGE
Complementarity to Drive Higher Customer Wallet Share
VYBS KMB Merged
Corporate & Business Banking √ √ √ √ √ √ √
Commercial Banking (CV,CE etc) √ √ √ √ √ √ √
Consumer Finance √ √ √ √ √ √ √
Agriculture/Tractor √ √ √ √ √ √ √ √
Deposits - CA √ √ √ √ √
Deposits - SA √ √ √ √ √
Fees (Fx, Trade) √ √ √ √ √
Private Banking / Broking / IB √ √ √ √ √ √ √
Asset Management / Insurance - √ √ √ √
VYBS KMB Merged
Large Corporates √ √ √ √ √ √
Mid Corporates √ √ √ √ √
SMEs (including Traders) √ √ √ √ √ √ √ √
High Net Individuals √ √ √ √ √ √ √
Mass Affluent √ √ √ √ √ √ √
Mass Market √ √ √
NRIs √ √ √ √ √
MNCs √ √ √ √ √
Larger Share of Customer Wallet
Expand Customer / Product horizons
Serve customers nationally and internationally
Significant Product Complementarities Fuller Customer Segment Coverage
Source: Banks, HDFC sec Inst Research
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KOTAK MAHINDRA BANK : INITIATING COVERAGE
Merger with VYSB
Deposits break up
Source: Banks, HDFC sec Inst Research
Retail loans break upBranch distribution region wise
Loan book break up
West 30%
North 27%
South 38%
East 5%
Mortgages
39%
PL 12%
Commercial &
Auto 40%
Other 8%
CA 15%
SA 17%
CD 8%
TD 68%
Retail 40%
Large 33%
SME 17%
Agri 12%
Source: Banks, HDFC sec Inst Research
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KOTAK MAHINDRA BANK : INITIATING COVERAGE
KMB : Five Quarters At A Glance
Rs mn 3QFY15 4QFY15 1QFY16 2QFY16 3QFY16 YoY (%) QoQ (%)
Net Interest Income 15.5 11.2 16.0 16.8 17.7 13.9 5.2
Non Interest Income 7.0 6.7 5.9 6.2 7.2 3.2 17.3Operating income 22.5 17.9 21.9 22.9 24.9 10.6 8.5
Operating expenses 12.3 9.3 15.9 12.5 12.8 4.1 2.7
Pre provision profits 10.2 8.6 6.0 10.4 12.1 18.4 15.4
Provisions and contingencies 0.9 0.7 3.1 1.8 2.4 157.3 33.4
PBT 9.3 7.9 2.9 8.7 9.7 4.7 11.7
Provision for Tax 3.2 2.7 1.0 3.0 3.4 6.1 12.2
PAT 6.1 5.3 1.9 5.7 6.3 4.0 11.5
Balance Sheet items/ratios
Deposits (Rs bn) 1,190 749 1,168 1,232 1,309 10.0 6.3
CASA (%) 31.7 36.4 34.3 36.2 35.3 362.3 (97.0)
Advances (Rs bn) 1,052 662 1,036 1,117 1,153 9.6 3.3Retail (%) 30.1 39.6 32.6 32.2 32.7 253.1 44.4
Agri (%) 14.3 18.3 14.7 15.3 14.6 29.7 (75.0)
Business banking (%) 20.1 9.7 20.7 20.3 20.3 22.0 1.7
Corp (%) 34.6 30.7 30.1 30.4 30.6 (406.9) 18.3
Others (%) 0.9 1.8 1.8 1.8 1.9 102.1 10.6
CD ratio (%) 88.4 88.4 88.7 90.6 88.1 (29.8) (253.6)
Profitability
Calc. Yield on Advances (%) 11.7 9.2 14.4 11.4 11.1 (61.4) (23.7)
Calc. Cost of Funds (%) 7.2 5.2 8.5 6.6 6.4 (78.4) (20.0)
NIM (%) 3.9 3.4 5.0 4.2 4.2 31.2 2.6
Cost-Income Ratio (%) 54.8 51.9 72.7 54.5 51.6 (321.9) (290.0)Tax Rate (%) 34.1 33.6 34.9 34.4 34.6 44.3 14.6
Asset Quality
Gross NPA (Rs bn) 19.8 12.4 24.2 26.6 26.9 35.6 1.3
Net NPA (Rs bn) 9.0 6.1 10.8 11.7 11.1 23.7 (4.9)
Gross NPAs (%) 1.9 1.9 2.3 2.4 2.3 44.7 (4.6)
Net NPAs (%) 0.9 0.9 1.0 1.0 1.0 10.9 (8.3)
Coverage Ratio (%) 54.7 50.8 55.5 56.0 58.7 398.6 268.5
Restructured Book (%) 0.7 0.2 0.4 0.4 0.3 (35.2) (6.1)
Source: Banks, HDFC sec Inst Research; Proforma of VYSB + KMB for 3QFY15; 4QFY15 - KMB standalone; 1QFY16 onwards merged entity
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KOTAK MAHINDRA BANK : INITIATING COVERAGE
KMB : Snapshot
Rs bn FY13 FY14 FY15 FY16E FY17E FY18E
Loans 484.7 530.3 661.6 1,197.3 1,398.7 1,659.4Chg (%) 24.0 9.4 24.8 12.2 16.8 18.6
Deposits 510.3 590.7 748.6 1,348.4 1,589.4 1,885.7
Chg (%) 32.4 15.8 26.7 11.6 17.9 18.6
Net Interest Income 32.1 37.2 61.7 73.3 85.1 97.5
Chg (%) 27.6 16.0 65.8 18.8 16.2 14.5
NIM (%) 4.6 4.6 4.7 4.4 4.6 4.5
Core C-I Ratio (%) 52.5 51.5 54.8 60.9 57.2 55.3
PPOP 21.6 25.8 41.9 41.5 52.9 63.2
Chg (%) 30.3 19.5 62.6 (1.1) 27.5 19.5
PBT 19.7 22.7 37.5 31.3 44.4 54.8
Chg (%) 23.3 15.2 65.2 (16.7) 42.1 23.4
PAT 13.6 15.0 24.8 20.8 29.6 36.5
Chg (%) 25.4 10.4 65.1 (16.1) 42.1 23.4
EPS (Rs) 18.2 19.5 24.2 11.4 16.1 19.9
Core ABV (Rs) 117.2 145.9 168.3 118.1 131.2 148.8
Core RoAA (%) 1.83 1.76 1.94 1.41 1.45 1.54
Core RoAE (%) 15.6 13.83 14.13 11.00 11.83 13.40
GNPA (%) 1.6 2.0 1.9 2.3 2.3 2.0
NNPA (%) 0.6 1.1 0.9 1.2 1.2 0.9
Source: Bank, HDFC sec Inst Research
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KOTAK MAHINDRA BANK : INITIATING COVERAGE
KMB : Standalone Financials
Source: Bank, HDFC sec Inst Research
(Rs mn) FY14 FY15 FY16E FY17E FY18E
Interest Earned 87,671 97,199 162,546 202,258 233,116
Interest Expended 50,471 54,961 89,266 117,119 135,644
Net Interest Income 37,200 42,237 73,280 85,140 97,472
Other Income 13,997 20,285 26,649 32,593 39,329
Fee Income (CEB) 8,531 12,263 17,361 22,029 28,210
Treasury Income 1,818 3,148 3,875 4,250 3,750
Total Income 51,198 62,522 99,930 117,733 136,801
Total Operating Exp 25,426 32,547 58,473 64,856 73,626
Employee Expense 11,722 14,667 29,120 32,521 36,719PPOP 25,772 29,975 41,456 52,877 63,175
Provisions 3,047 1,645 10,202 8,468 8,382
Prov. for NPAs (incl.
std prov.)1,473 2,582 9,727 7,993 7,907
PBT 22,725 28,330 31,255 44,409 54,793
Provision for Tax 7,699 9,670 10,439 14,833 18,301
PAT 15,025 18,660 20,816 29,576 36,492
(Rs mn) FY14 FY15 FY16E FY17E FY18E
SOURCES OF FUNDS
Share Capital 3,852 3,862 9,163 9,163 9,163
Reserves 118,899 137,579 227,754 253,860 286,080
Shareholder's Funds 122,751 141,441 236,917 263,022 295,243
Savings 100,870 140,361 272,332 359,478 458,334
Current 87,408 131,813 214,883 231,000 248,325
Term Deposit 402,445 476,429 861,205 998,912 1,179,038
Total Deposits 590,723 748,603 1,348,420 1,589,390 1,885,697
Borrowings 129,041 121,497 223,789 246,166 270,779Other Liabilities 33,338 48,580 85,054 93,559 102,915
Total Liabilities 875,853 1,060,121 1,894,179 2,192,136 2,554,634
APPLICATION OF
FUNDS
Cash & Bank Balance 59,799 62,624 141,737 160,047 171,731
Investments 254,845 304,211 480,040 551,435 633,296
G-Secs 174,654 228,817 401,155 468,870 546,852
Advances 530,276 661,607 1,197,287 1,398,663 1,659,414Fixed Assets 11,069 12,067 16,291 17,920 19,712
Other Assets 19,863 19,612 58,824 64,072 70,482
Total Assets 875,853 1,060,121 1,894,179 2,192,136 2,554,634
Income Statement Balance Sheet
Source: Bank, HDFC sec Inst Research
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KOTAK MAHINDRA BANK : INITIATING COVERAGE
KMB Financials
(Rs mn) FY14 FY15 FY16E FY17E FY18E
Valuation ratiosEPS 19.5 24.2 11.4 16.1 19.9
Earnings growth (%) 10.4 24.2 11.6 42.1 23.4
BVPS (ex reval.) 153.4 176.2 126.1 140.0 157.2
Adj. BVPS (Core) 145.9 168.3 118.1 131.2 148.8
ROAA (%) 1.76 1.94 1.41 1.45 1.54
ROAE (%) 13.8 14.1 11.0 11.8 13.1
ROAE (%) (Core) 13.8 14.1 11.0 11.8 13.4
Core P/E (x) 25.7 18.4 50.2 34.3 26.7
Core P/ABV (x) 3.43 2.64 4.83 4.22 3.58
P/PPOP (x) 10.2 8.8 15.1 11.9 9.9Dividend Yield (%) 0.1 0.1 0.1 0.1 0.1
PROFITABILITY
Yield on Advances (%) 13.2 12.5 12.7 12.2 12.0
Yield on Investment (%) 7.5 7.9 8.0 7.9 7.8
Cost of Funds (%) 7.0 6.9 7.3 6.9 6.8
Cost of Deposits (%) 6.9 6.8 6.7 6.6 6.5
Core Spread (%) 6.1 5.6 5.4 5.4 5.2
NIM (%) 4.6 4.7 4.4 4.6 4.5
OPERATING
EFFICIENCYCost/Avg. Asset Ratio
(%)3.0 3.4 4.0 3.2 3.1
Cost-Income Ratio (Excl
Treasury)51.5 54.8 60.9 57.2 55.3
Source: Bank, HDFC sec Inst Research
(Rs mn) FY14 FY15 FY16E FY17E FY18E
BALANCE SHEETSTRUCTURE RATIOS
Loan Growth (%) 9.4 24.8 81.0 16.8 18.6
Deposit Growth (%) 15.8 26.7 80.1 17.9 18.6
C/D Ratio (%) 89.8 88.4 88.8 88.0 88.0
Equity/Assets (%) 14.0 13.3 12.512.0
11.6
Equity/Advances (%) 23.1 21.4 19.8 18.8 17.8
CASA (%) 31.9 36.4 36.1 37.2 37.5
Total Capital Adequacy
Ratio (CAR)
18.8 17.2 16.7 15.8 15.0
Tier I CAR 17.8 16.2 16.1 15.3 14.6
ASSET QUALITY
Gross NPLs (Rs bn) 10.6 12.4 27.9 32.0 32.8
Net NPLs (Rs bn) 5.7 6.1 14.6 16.1 15.4
Gross NPLs (%) 2.0 1.9 2.3 2.3 2.0
Net NPLs (%) 1.1 0.9 1.2 1.2 0.9
Coverage Ratio (%) 45.9 50.8 47.8 49.5 53.2
Provision/Avg. Loans (%) 0.3 0.4 1.0 0.6 0.5
ROAA TREE
Net Interest Income 4.34% 4.36% 4.96% 4.17% 4.11%Non Interest Income 1.63% 2.10% 1.80% 1.60% 1.66%
Treasury Income 0.21% 0.33% 0.26% 0.21% 0.16%
Operating Cost 2.97% 3.36% 3.96% 3.17% 3.10%
Provisions 0.36% 0.17% 0.69% 0.41% 0.35%
Provisions for NPAs 0.15% 0.20% 0.48% 0.35% 0.30%
Tax 0.90% 1.00% 0.71% 0.73% 0.77%
ROAA 1.75% 1.93% 1.41% 1.45% 1.54%
Leverage (x) 7.89 7.33 7.81 8.17 8.50
ROAE 13.83% 14.13% 11.00% 11.83% 13.07%
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KOTAK MAHINDRA BANK : INITIATING COVERAGE
Banks : Peer valuation
Source: HDFC sec Inst Research, #Adjusted for subsidiaries
Mcap
(Rs bn)
CMP
(Rs)
RatingTP
(Rs)
ABV (Rs) P/E (x) P/ABV (x) RoAE (%) RoAA (%)
FY16E FY17E FY18E FY16E FY17E FY18E FY16E FY17E FY18E FY16E FY17E FY18E FY16E FY17E FY18EAXSB 1,053 444 BUY 537 206 236 275 12.7 11.2 9.6 2.16 1.88 1.62 17.2 16.9 17.1 1.67 1.61 1.56
CUB 55 93 BUY 107 46 53 60 12.3 11.0 9.4 2.03 1.77 1.55 15.7 15.5 15.9 1.52 1.50 1.53
DCBB 22 76 BUY 101 57 63 69 12.8 12.7 10.0 1.33 1.22 1.10 10.1 9.2 10.6 0.95 0.77 0.79
FB 80 47 BUY 69 43 48 53 12.4 9.1 7.7 1.08 0.98 0.88 8.0 10.0 10.9 0.74 0.89 0.91
ICICIBC # 1,379 238 BUY 285 113 124 141 8.7 8.3 6.4 1.62 1.42 1.18 14.2 12.4 13.9 1.78 1.58 1.70
IIB 558 946 BUY 1,045 289 333 387 24.1 18.4 14.9 3.27 2.84 2.44 16.8 16.3 17.4 1.88 1.98 1.99
KMB# 1,255 685 BUY 747 118 131 149 50.2 34.3 26.7 4.83 4.22 3.58 10.7 11.9 13.4 1.38 1.45 1.54
BOB 337 146 BUY 147 74 88 113-17.3 13.6 8.5 1.96 1.66 1.29
-5.0 6.3 9.4 -0.27 0.32 0.46
OBC 27 89 BUY 124 172 177 212 8.8 4.0 3.3 0.52 0.50 0.42 2.3 4.9 5.6 0.13 0.27 0.30
SBIN # 1,530 197 BUY 218 110 115 132 9.8 8.1 6.2 1.26 1.22 1.02 8.7 9.6 11.3 0.51 0.57 0.65
UNBK 89 129 BUY 137 137 152 179 6.2 4.0 3.1 0.94 0.85 0.72 7.4 10.3 12.3 0.37 0.53 0.63
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KOTAK MAHINDRA BANK : INITIATING COVERAGE
Lending Business : Kotak Mahindra Prime
Kotak Mahindra Prime
(KMP)
Total Loans
Rs 219bn
Total carLoans
Rs 164bn
Calc. NIM (%)
4.7%
NNPA (%)
0.4%
RoAA (%)
2.4%
Contribution toconsol
Loans : 15%
PAT : 15%
Per sharevalue forKMB: Rs77/share
Data as of Dec-15; per share vale after 20% holdo discount
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KOTAK MAHINDRA BANK : INITIATING COVERAGE
KMP - Car finance
KMP is a leading NBFC that provides asset financing for
passenger cars, multi-utility vehicles and pre-owned cars. It also
offers inventory and infrastructure funding to car dealers. As of
FY15, KMP contributed ~22% of total loans and ~17% of
consolidated profits of KMB
As of Dec-2015, KMP had 78 branches in 18 states and a wide
network of direct marketing associates, brokers and agencies.
KMP’s disbursements and AUM grew at 9% and 12.6% CAGR
during FY12-15. With ~30bps fall in calculated NIM (5%), core
earnings grew ~12%. Further, a ~40% rise GNPAs (Rs 1.5bn,
77bps) pushed up provisioning cost by ~49% CAGR. This, in
turn, resulted in PAT growth of
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KOTAK MAHINDRA BANK : INITIATING COVERAGE
KMP : Industry leading auto financier
ROAA
Source: Bank, HDFC sec Inst Research
PAT & Growth
NNPA :
(5.0)
-
5.0
10.0
15.0
20.0
25.0
30.0
800
900
1,000
1,100
1,200
1,300
1,400
1,500
1 Q F Y 1 3
2 Q F Y 1 3
3 Q F Y 1 3
4 Q F Y 1 3
1 Q F Y 1 4
2 Q F Y 1 4
3 Q F Y 1 4
4 Q F Y 1 4
1 Q F Y 1 5
2 Q F Y 1 5
3 Q F Y 1 5
4 Q F Y 1 5
1 Q F Y 1 6
2 Q F Y 1 6
3 Q F Y 1 6
KMP - PAT (LHS) YoYRs mn %
2.7
3.1
2.7
2.9
2.7
2.9
2.9
2.9
2.7
2.7
2.5
2.9
2.4
2.6
2.4
2.0
2.2
2.4
2.6
2.8
3.0
3.2
1 Q F Y 1 3
2 Q F Y 1 3
3 Q F Y 1 3
4 Q F Y 1 3
1 Q F Y 1 4
2 Q F Y 1 4
3 Q F Y 1 4
4 Q F Y 1 4
1 Q F Y 1 5
2 Q F Y 1 5
3 Q F Y 1 5
4 Q F Y 1 5
1 Q F Y 1 6
2 Q F Y 1 6
3 Q F Y 1 6
%
0
0.1
0.2
0.3
0.4
0.5
0.6
0
200
400
600
800
1,000
1,200
1 Q F Y 1 3
2 Q F Y 1 3
3 Q F Y 1 3
4 Q F Y 1 3
1 Q F Y 1 4
2 Q F Y 1 4
3 Q F Y 1 4
4 Q F Y 1 4
1 Q F Y 1 5
2 Q F Y 1 5
3 Q F Y 1 5
4 Q F Y 1 5
1 Q F Y 1 6
2 Q F Y 1 6
3 Q F Y 1 6
NNPA (LHS) NNPA (RHS %)Rs mn %
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KOTAK MAHINDRA BANK : INITIATING COVERAGE
KMP : Financials
Source: Banks, HDFC sec Inst Research
Quarterly (Rs bn) 1QFY14 2QFY14 3QFY14 4QFY14 1QFY15 2QFY15 3QFY15 4QFY15 1QFY16 2QFY16 3QFY16
Total Loans 170.9 169.5 168.6 173.7 185.2 188.2 190.7 197.1 197.3 200.1 218.5
YoY (%) 21.1 11.7 5.1 2.1 8.3 11.0 13.1 13.4 6.5 6.3 14.6Car Loans 130.6 131.4 130.7 132.7 134.2 139.5 142.3 147.3 150.7 157.5 164.3
YoY (%) 17.0 11.7 6.8 3.9 2.8 6.2 8.9 10.9 12.3 13.0 15.4
% of total loans 76.4 77.5 77.5 76.4 72.5 74.1 74.6 74.7 76.4 78.7 75.2
Net Interest Income 2.1 2.2 2.2 2.4 2.2 2.3 2.2 2.5 2.4 2.4 2.5
YoY (%) 31.4 25.0 5.9 20.6 5.4 3.2 2.3 5.0 8.8 4.4 12.3
cal. NIM (%) 4.8 5.2 5.1 5.6 4.8 4.9 4.6 5.2 4.8 4.8 4.7
Total Income 25.3 26.5 26.0 28.3 26.7 27.8 26.8 30.9 27.7 29.8 29.7
YoY (%) 26.5 17.8 6.6 17.9 5.5 4.9 3.1 9.2 3.7 7.2 10.8
PBT 1.8 1.9 1.9 1.9 1.8 1.9 1.8 2.2 1.8 2.0 1.9
YoY (%) 28.8 12.4 20.3 10.3 2.2 (0.5) (3.7) 13.5 - 2.6 5.5PAT 1.2 1.3 1.2 1.3 1.2 1.3 1.2 1.4 1.2 1.3 1.3
YoY (%) 24.5 9.6 17.1 5.9 2.6 - (2.4) 13.5 (0.8) 1.6 5.0
NNPA (Rs mn) 310.0 510.0 630.0 560.0 650.0 640.0 830.0 788.3 986.4 800.5 874.0
NNPA (%) 0.2 0.3 0.4 0.3 0.3 0.3 0.4 0.4 0.5 0.4 0.4
(Rs bn) FY15 FY16E FY17E FY18E
Total Loans 191.5 214.2 244.4 284.6
YoY (%) 10.0 11.9 14.1 16.5
Net Interest Income 9.1 10.0 11.1 12.7
YoY (%) 6.6 10.0 11.2 14.8
Calc. NIM (%) 4.96 4.91 4.83 4.81
PBT 7.7 8.3 9.2 10.5
YoY (%) 3.0 7.0 10.5 15.0
PAT 5.1 5.4 6.0 6.9
YoY (%) 3.3 7.0 10.5 15.0
RoAA (%) 2.78 2.68 2.61 2.61
RoAE (%) 16.4 15.0 14.3 14.3
GNPA (%) 0.8 0.8 0.8 0.8
NNPA (%) 0.4 0.4 0.3 0.3
RoAA TREE FY15 FY16E FY17E FY18E
Net Interest Income 4.96% 4.91% 4.83% 4.81%
Non Interest Income 1.18% 1.18% 1.15% 1.10%
Operating Cost 1.78% 1.81% 1.79% 1.75%
Provisions 0.12% 0.20% 0.20% 0.19%
Tax 1.46% 1.41% 1.38% 1.37%
ROAA 2.78% 2.68% 2.61% 2.61%
Leverage (x) 5.90 5.60 5.47 5.47
ROAE 16.39 % 14.99% 14.30% 14.26%
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KOTAK MAHINDRA BANK : INITIATING COVERAGE
Kotak Mahindra Investments : LAS# business
Kotak Mahindra Investments
(KMI)
Total Loans
Rs 47.6bn
Calc NIM (%)
6.4%NNPA (%)
0.06%
RoAA (%)
4.5%
Contribution to
Loans : 3.4%
PAT : 4.3%
Per share value forKMB: Rs 12
Data as of Dec-15; per share vale after 20% holdo discount
# Loans against securities
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KOTAK MAHINDRA BANK : INITIATING COVERAGE
KMI : LAS Business
Kotak Mahindra Investments is primarily in the loan-against-
securities (LAS) business. It also lends to several corporates and
the real estate sector. As of FY15, KMI contributed ~3.7% of
total loans and ~3.5% of consolidated profits.
AUM growth of ~64% (100%+ in FY15) CAGR and ~120bps rise
in calc. NIM led to ~54% rise in core earnings over FY12-15.
Further, with flat provisions, net earnings grew ~115% CAGR.
For 9MFY16, AUM grew ~58% YoY, thus leading to core and net
earnings growth of ~60% each. Asset quality was unblemished
with NNPAs at a mere 6bps. It contributed ~3.4% of total loans
and 4.3% of consolidated earnings.
We have assigned 2.5x to KMI’s core adj. networth to arrive at
a fair value of Rs 28.1bn i.e Rs 15.4 per share of KMB. After a
20% holdco discount, KMI contributes Rs 12/sh to our SOTP
Source: Banks, HDFC sec Inst Research
Total Income and PAT : Quarterly trend
NNPA (%) : remains comfortableCustomer assets : Strong growth momentum
8.6 7.411.7
15.6
23.8 23.6
30.2 32.7 34.3
40.2
47.6
-
10.0
20.0
30.0
40.0
50.0
1 Q F Y 1 4
2 Q F Y 1 4
3 Q F Y 1 4
4 Q F Y 1 4
1 Q F Y 1 5
2 Q F Y 1 5
3 Q F Y 1 5
4 Q F Y 1 5
1 Q F Y 1 6
2 Q F Y 1 6
3 Q F Y 1 6
Rs bn
2 . 2
2 . 0
1 . 0
0 . 5
0 . 5 0
. 2
0 . 2
0 . 1
0 . 1 0
. 1
0 . 1
0.00
0.50
1.00
1.50
2.00
2.50
0
50
100
150
200
1 Q F Y 1 4
2 Q F Y 1 4
3 Q F Y 1 4
4 Q F Y 1 4
1 Q F Y 1 5
2 Q F Y 1 5
3 Q F Y 1 5
4 Q F Y 1 5
1 Q F Y 1 6
2 Q F Y 1 6
3 Q F Y 1 6
NNPA (Rs mn) NNPA (%; RHS)
1 4 0 2
1 0
2 3 0 3
1 0 3
6 0
4 7 0
4 7 0
7 1 0
5 6 0
6 8 0 7
3 0
1 0
1 1 0
1 1 0 1
6 0
1 7 0 2
5 0
2 4 0
4 0 0
3 0 0 3
6 0
3 9 0
0
100
200
300
400
500
600
700
800
1 Q F Y 1 4
2 Q F Y 1 4
3 Q F Y 1 4
4 Q F Y 1 4
1 Q F Y 1 5
2 Q F Y 1 5
3 Q F Y 1 5
4 Q F Y 1 5
1 Q F Y 1 6
2 Q F Y 1 6
3 Q F Y 1 6
Total Income PATRs mn
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KOTAK MAHINDRA BANK : INITIATING COVERAGE
KMI : Financials
Source: Banks, HDFC sec Inst Research
Rs bn FY15 FY16E FY17E FY18E
Total Loans 32.1 36.9 42.5 48.8
YoY (%) 107.6 15.0 15.0 15.0
Net Interest Income 1.74 2.46 2.70 2.97
YoY (%) 121.4 40.9 10.0 9.7
Calc. NIM (%) 6.83 6.60 6.31 6.02
PBT 1.58 2.26 2.47 2.71
YoY (%) 145.7 42.6 9.5 9.7PAT 1.06 1.50 1.64 1.80
YoY (%) 152.9 41.0 9.5 9.7
RoAA (%) 4.47 4.34 4.14 3.95
RoAE (%) 20.20 21.67 19.35 17.65
Rs mn 1QFY14 2QFY14 3QFY14 4QFY14 1QFY15 2QFY15 3QFY15 4QFY15 1QFY16 2QFY16 3QFY16
Total Loans 8600 7410 11740 15550 23830 23590 30200 32680 34310 40240 47610
YoY (%) 177.1 218.4 157.2 110.2 44.0 70.6 57.6NII 130 200 190 270 300 390 440 500 480 630 700
YoY (%) 130.8 95.0 131.6 85.2 60.0 61.5 59.1
Calc. NIM - 10.0 7.9 7.9 6.1 6.6 6.5 6.4 5.7 6.8 6.4
Total Income 140 210 230 310 360 470 470 710 560 680 730
YoY (%) 157.1 123.8 104.3 129.0 55.6 44.7 55.3
PBT 70 180 160 240 260 380 370 570 460 550 600
YoY (%) 271.4 111.1 131.3 137.5 76.9 44.7 62.2
PAT 10 110 110 160 170 250 240 400 300 360 390
YoY (%) 1,600.0 127.3 118.2 150.0 76.5 44.0 62.5
ROAA Tree FY15 FY16E FY17E FY18E
Net Interest Income 6.5% 6.3% 6.2% 6.1%
Non Interest Income 1.0% 0.7% 0.7% 0.6%
Operating Cost 1.4% 1.0% 1.0% 0.9%
Provisions 0.2% 0.2% 0.2% 0.2%
Tax 1.9% 1.9% 1.9% 1.9%
ROAA 4.0% 3.8% 3.8% 3.7%
Leverage(x) 5.1 5.6 5.2 5.0
ROAE 20.2% 21.7% 19.8% 18.4%
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Capital Market Business
Kotak Securities (K-sec)
Avg Daily Vol.
64.8bn
Market share
2.7%Total income
Rs 7.48bn
Net earnings
Rs 2.0bn
Contribution to
PAT : 8.3%
Per share value forKMB: Rs 21
Data as of Dec-15; per share vale after 20% holdo discount
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Kotak Securities (K-Sec)
One of the leading domestic brokerage houses in the country, K-
Sec has more than 1,197 branches across 352 cities, with over
1.1mn customer ACs. It has maintained its market share in the
2.7-2.9% range over the past seven quarters. K-Sec contributed
~9.5% of consolidated earnings as of FY15.
Pick-up in macros, improving pipeline for IPO/OFS and
disinvestments, coupled with deeper product offering to e-
VYSB customers, will drive momentum.
Over FY16-18E, we have factored in a total income growth of
6% CAGR with 8% volume growth. PAT growth is expected to
be a mere 4% CAGR.
We have assigned 15x to K-Sec’s net earnings to arrive at
valuations of Rs 49bn i.e Rs 26.8 per share of KMB. After a
20% holdco discount, K-Sec contributes Rs 21/sh to our SOTP
Volume and Market share
Total income : Quarterly trend PAT : Quarterly trend
(20.0)
-
20.0
40.0
60.0
80.0
100.0
0.0
0.5
1.0
1.5
2.0
2.5
3.0
3.5
1 Q F Y 1 3
2 Q F Y 1 3
3 Q F Y 1 3
4 Q F Y 1 3
1 Q F Y 1 4
2 Q F Y 1 4
3 Q F Y 1 4
4 Q F Y 1 4
1 Q F Y 1 5
2 Q F Y 1 5
3 Q F Y 1 5
4 Q F Y 1 5
1 Q F Y 1 6
2 Q F Y 1 6
3 Q F Y 1 6
Total Income (Rs bn) YoY (%) RHS
(100.0)
(50.0)
-
50.0
100.0
150.0
200.0
250.0
300.0
0
200
400
600
800
1,000
1,200
1 Q F Y 1 3
2 Q F Y 1 3
3 Q F Y 1 3
4 Q F Y 1 3
1 Q F Y 1 4
2 Q F Y 1 4
3 Q F Y 1 4
4 Q F Y 1 4
1 Q F Y 1 5
2 Q F Y 1 5
3 Q F Y 1 5
4 Q F Y 1 5
1 Q F Y 1 6
2 Q F Y 1 6
3 Q F Y 1 6
PAT (LHS) YoYRs mn %
Source: Banks, HDFC sec Inst Research
2.0
2.2
2.4
2.6
2.8
3.0
0.0
20.0
40.0
60.0
80.0
100.0
1 Q F Y 1 3
2 Q F Y 1 3
3 Q F Y 1 3
4 Q F Y 1 3
1 Q F Y 1 4
2 Q F Y 1 4
3 Q F Y 1 4
4 Q F Y 1 4
1 Q F Y 1 5
2 Q F Y 1 5
3 Q F Y 1 5
4 Q F Y 1 5
1 Q F Y 1 6
2 Q F Y 1 6
3 Q F Y 1 6
Avg Daily Vol ( bn) Market S hare ( %) R HS
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K-Sec : Financials
Source: Banks, HDFC sec Inst Research
K Sec (Rs mn) 1QFY14 2QFY14 3QFY14 4QFY14 1QFY15 2QFY15 3QFY15 4QFY15 1QFY16 2QFY16 3QFY16
K Sec Vol (bn) 36.92 42.48 37.2 39.46 60.53 66.21 73.78 83.72 78.13 75.93 64.81Market Shares (%) 2.2 2.4 2.3 2.4 2.9 2.7 2.8 2.9 2.7 2.7 2.7
Total Income 1470 1520 1680 1600 2230 2240 2230 2890 2500 2700 2280
YoY (%) 11.4 (1.9) 15.1 (1.8) 51.7 47.4 32.7 80.6 12.1 20.5 2.2
Brokerage (bps) 0.07 0.06 0.08 0.07 0.06 0.06 0.05 0.06 0.05 0.06 0.06
PBT 480 600 710 550 1030 1000 910 1470 1020 1200 830
YoY (%) 37.1 1.7 24.6 48.6 114.6 66.7 28.2 167.3 (1.0) 20.0 (8.8)
PAT 310 400 460 440 680 660 600 960 670 780 550
YoY (%) 34.8 - 21.1 238.5 119.4 65.0 30.4 118.2 (1.5) 18.2 (8.3)
(Rs mn) FY14 FY15 FY16E FY17E FY18E
Avg. Daily Vol (bn) 39.03 71.07 76.40 80.22 89.85
YoY (%) 10.5 82.1 7.5 5.0 12.0
Total Income 6,269 9,598 10,036 10,341 11,361
YoY (%) 8.3 53.1 4.6 3.0 9.9
PBT 2,343 4,414 4,015 4,343 4,999
YoY (%) 24.3 88.4 (9.0) 8.2 15.1
PAT 1,602 2,896 2,634 2,849 3,279
YoY (%) 39.9 80.8 (9.0) 8.2 15.1
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Capital Market Business
Kotak Asset Management Company (K-AMC)
Avg. AUM
Rs551bn
Equity AUMRs 131bn;
~14% share
Off shore AUM
Rs211bn; 22%share
AlternateFunds
Rs 56bn; 6%share
Total income
Rs 780mn
Contribution to
PAT : 2.0%
Per sharevalue for
KMB: Rs 24
Data as of Dec-15; per share vale after 20% holdo discount and includes Rs 9 for Alternative and offshore funds
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Kotak AMC
Avg AUM
Total Income and PAT
2 8 0
2 3 0
4 1 0
3 7 0
3 7 0
5 1 0
4 7 0
4 2 0
2 9 0 3
6 0
3 2 0
3 8 0
5 4 0
5 9 0
5 9 0
(400)
(200)
0
200
400
600
800
1 Q F Y 1 3
2 Q F Y 1 3
3 Q F Y 1 3
4 Q F Y 1 3
1 Q F Y 1 4
2 Q F Y 1 4
3 Q F Y 1 4
4 Q F Y 1 4
1 Q F Y 1 5
2 Q F Y 1 5
3 Q F Y 1 5
4 Q F Y 1 5
1 Q F Y 1 6
2 Q F Y 1 6
3 Q F Y 1 6
Total Income PAT
Of the country’s ~43 fund houses that had Rs 13.4trn average
assets under management (AAUM) at the end of Feb 2015,
Kotak ranks 8th with an AAUM size of Rs 589bn. Its market has
improved to 4.4% vs. 3.4/3.9% in Mar-15/Mar-14 and has
moved up from the 9th position in the same period.
The e-VYSB merger with a new clientele from various
geographies will help grow AUMs for Kotak AMC.
Over FY16-18E, we have factored in AUM CAGR of ~10% thus,
leading to total income growth of 7% CAGR. PAT growth is
expected to be 9% CAGR. We have valued domestic AUMs at 5% FY18E to arrive at
valuation of Rs 35.3bn i.e. Rs 19.3 /share of KMB (i.e. 2.6% of
total TP). After a 20% holdco discount, K-AMC contributes Rs
15/sh to our SOTP
We expect alternative assets’ business to grow at a mere 5%
CAGR over FY16-18E. We value this business at 7.5% FY18E
AUM of Rs 65.3bn to arrive at valuation of Rs 4.9bn i.e. Rs 2.7/
Share of KMB. After a 20% holdco discount, Alternative assetscontributes Rs 2/sh to our SOTP
Over FY16-18E, we have factored ~12% CAGR in the offshore
AUMs. At 5% of FY18E AUMs of Rs 292bn, we assign valuation
of Rs 14.5bn i.e. Rs 8/share for KMB. After a 20% holdco
discount, offshore assets contributes Rs 6/sh to our SOTP
47 48 50 48 52 51 48 45 47 43 40 36 41 39 42
6 6 5 55 5 6 6 7 9 10 12
14 14 14
16 18 17 18 1616 17 18 18 19 22 26 23 25
22
19 17 18 19 17 17 18 20 18 19 18 18 18 15 15
1 Q F Y 1 3
2 Q F Y 1 3
3 Q F Y 1 3
4 Q F Y 1 3
1 Q F Y 1 4
2 Q F Y 1 4
3 Q F Y 1 4
4 Q F Y 1 4
1 Q F Y 1 5
2 Q F Y 1 5
3 Q F Y 1 5
4 Q F Y 1 5
1 Q F Y 1 6
2 Q F Y 1 6
3 Q F Y 1 6
Debt Equity Alternate assets Offshore Funds Insurance PMS
Source: Banks, HDFC sec Inst Research
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Kotak AMC : Financials
Source: Banks, HDFC sec Inst Research
1QFY14 2QFY14 3QFY14 4QFY14 1QFY15 2QFY15 3QFY15 4QFY15 1QFY16 2QFY16 3QFY16
AUM (Rs bn) 628 605 599 566 666 657 714 806 942 960 957
Debt (%) 52 51 48 45 47 43 40 36 41 39 42
Equity (%) 5 5 6 6 7 9 10 12 14 14 14
Alternate Assets (%) 8 10 10 10 9 9 9 7 6 6 6
Offshore Funds(%) 16 16 17 18 18 19 22 26 23 25 22
Insurance (%) 17 17 18 20 18 19 18 18 18 15 15
PMS (%) 2 1 1 1 1 1 1 1 1 1 0
Total Income (Rs mn) 370 510 470 420 290 360 320 380 540 590 590
YoY (%) 32.1 121.7 14.6 13.5 (21.6) (29.4) (31.9) (9.5) 86.2 63.9 84.4
PBT (Rs mn) 110 260 180 50 0 0 -90 -160 210 240 130
PAT (Rs mn) 70 170 120 40 0 -10 -10 -180 200 230 40
Rs mn FY13 FY14 FY15 FY16E FY17E FY18E
Average AUM (Rs bn) 359 335 417 583 641 706
Growth YoY 16.8 (6.8) 24.3 40.0 10.0 10.0Total Income 1,171 1,770 1,370 2,041 2,181 2,328
Chg (%) 2.4 51.2 (22.6) 49.0 6.9 6.8
PBT 29.5 600.0 (250.0) 714.3 790.6 855.7
Chg (%) (85.4) 1,936.7 (141.7) (385.7) 10.7 8.2
PAT 34.7 410.0 (290.0) 471.5 521.8 564.8
Chg (%) (75.8) 1,082.5 (170.7) (262.6) 10.7 8.2
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Capital Market Business
Kotak Mahindra Capital Co (KMCC)
Total Income
Rs 780mn
PAT
Rs160mnContribution to
PAT : ~1%
Per share value for KMB:Re 1
Data as of Dec-15; per share vale after 20% holdo discount
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KMCC : Investment Banking
KMCC : Financials KMCC is one of the leading Investment Banks in India. In FY15,
KMCC successfully completed 17 marquee transactions across
various product formats. On the equity side, KMCC successfullycompleted two IPOs, two government disinvestments, one IPP,
four block deals and eight QIPs, raising a total of Rs 347bn, and
was ranked the no. 1 book running lead manager.
We have factored income growth of 11% CAGR and net
earnings CAGR of 6.5% over FY16-18E.
We have assigned 1x to KMCC’s core networth to arrive at a
fair value of Rs 2.6bn / Rs 1.4 per share of KMB (i.e. 0.2% of
total TP). After a 20% holdco discount, KMCC contributes Re1/sh to our SOTP
(Rs mn) 1QFY14 2QFY14 3QFY14 4QFY14 1QFY15 2QFY15 3QFY15 4QFY15 1QFY16 2QFY16 3QFY16
Total Income 220.0 120.0 260.0 250.0 120.0 110.0 130.0 520.0 210.0 290.0 280.0
Chg (%) (4.3) (40.0) 44.4 13.6 (45.5) (8.3) (50.0) 108.0 75.0 163.6 115.4
PBT 50.0 (30.0) 80.0 70.0 (60.0) (70.0) (60.0) 350.0 30.0 120.0 80.0
Chg (%) (37.5) (150.0) 166.7 16.7 (220.0) 133.3 (175.0) 400.0 (150.0) (271.4) (233.3)PAT 40.0 (20.0) 70.0 50.0 (40.0) (70.0) (60.0) 300.0 30.0 70.0 60.0
Chg (%) (33.3) (150.0) 250.0 25.0 (200.0) 250.0 (185.7) 500.0 (175.0) (200.0) (200.0)
(Rs mn) FY14 FY15 FY16E FY17E FY18E
Total Income 840 890 1,024 1,100 1,265
YoY (%) 0.9 6.0 15.0 7.5 15.0
PBT 180 160 189 193 215
YoY (%) (23.5) (11.1) 18.3 1.7 11.7
PAT 140 130 126 128 143
YoY (%) (16.2) (7.1) (3.1) 1.7 11.7
KMCC : Quarterly trend
Source: Banks, HDFC sec Inst Research
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Kotak Life Insurance Co.
Kotak Life Insurance Company (Kotak Life)
AUM
Rs 147.6bn
Total PAT
Rs 1.74bn
Solvency Ratio
3.2%
Per share value for KMB:Rs 16
Data as of Dec-15; per share vale after 20% holdo discount
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Kotak Life Insurance (K-life)
Solvency Ratio (%)AUM
Kotak Life Insurance is a 74:26 JV between KMB (and its
subsidiaries) and Old Mutual. It is one of the fastest growing life
insurance cos with market share of ~1.5% (Feb-16). K-Life
contributed ~14% to the total AUMs and ~7.5% to total profits
as on FY15.
We have factored APE CAGR of ~22% over FY16-18E and NBAP
margins of ~16%. We value K-Life at Rs 36.8bn (74% stake) i.e.
~Rs 20/share. After a 20% holdco discount, K-life contributes
Rs 16/sh to our SOTP
PAT and Growth
(50.0)
-
50.0
100.0
150.0
-
100
200
300
400
500
600
700
800
1 Q F Y 1 3
2 Q F Y 1 3
3 Q F Y 1 3
4 Q F Y 1 3
1 Q F Y 1 4
2 Q F Y 1 4
3 Q F Y 1 4
4 Q F Y 1 4
1 Q F Y 1 5
2 Q F Y 1 5
3 Q F Y 1 5
4 Q F Y 1 5
1 Q F Y 1 6
2 Q F Y 1 6
3 Q F Y 1 6
PAT (Rs mn) YoY (%, RHS)
-
5.0
10.0
15.0
20.0
25.0
30.0
-
20
40
60
80
100
120
140
160
1 Q F Y 1 3
2 Q F Y 1 3
3 Q F Y 1 3
4 Q F Y 1 3
1 Q F Y 1 4
2 Q F Y 1 4
3 Q F Y 1 4
4 Q F Y 1 4
1 Q F Y 1 5
2 Q F Y 1 5
3 Q F Y 1 5
4 Q F Y 1 5
1 Q F Y 1 6
2 Q F Y 1 6
3 Q F Y 1 6
AUM (Rs bn) YoY (%, RHS)
3.02.9
2.9 2.9
3.0
3.13.2
3.03.1
3.03.0
3.1
3.2
3.23.2
1 Q F Y 1 3
2 Q F Y 1 3
3 Q F Y 1 3
4 Q F Y 1 3
1 Q F Y 1 4
2 Q F Y 1 4
3 Q F Y 1 4
4 Q F Y 1 4
1 Q F Y 1 5
2 Q F Y 1 5
3 Q F Y 1 5
4 Q F Y 1 5
1 Q F Y 1 6
2 Q F Y 1 6
3 Q F Y 1 6
%
Source: Banks, HDFC sec Inst Research
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Rating Definitions
BUY : Where the stock is expected to deliver more than 10% returns over the next 12 month period
NEUTRAL : Where the stock is expected to deliver (-) 10% to 10% returns over the next 12 month period
SELL : Where the stock is expected to deliver less than (-) 10% returns over the next 12 month period
500
550
600
650
700
750800
M a r - 1 5
A p r - 1 5
M a y - 1 5
J u n - 1 5
J u l - 1 5
A u g - 1 5
S e p - 1 5
O c t - 1 5
N o v - 1 5
D e c - 1 5
J a n - 1 6
F e b - 1 6
M a r - 1 6
Kotak Mahindra Bank TP Date CMP Reco Target
30-Mar-16
685
BUY
747
RECOMMENDATION HISTORY
KOTAK MAHINDRA BANK : INITIATING COVERAGE
8/18/2019 report (49)
44/44
HDFC securities
Institutional Equities
Unit No. 1602, 16th Floor, Tower A, Peninsula Business Park, Senapati Bapat Marg, Lower Parel,
Mumbai - 400 013
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