Edelweiss has maintained its buy rating on Kotak Mahindra Bank in its May 12, 2008 research report. "Kotak Mahindra Bank (KMB)’s Q4FY08 results reflect a mix of the non-conducive capital market environment and unfavorable treasury/forex operations, being partially offset by continued traction in the commercial and investment banking (IB) businesses. Consolidated PAT (excluding life insurance) declined 37% Q-o-Q (34% growth Y-o-Y) to INR 2.4 billion (in-line with estimates). Profitability (standalone) declined 32% Q-o-Q, despite 12% Q-o-Q growth in NII, due to lower treasury income and provisions for MTM losses. Sharp correction in the equity markets led to a plunge in the profits of the broking and asset management businesses; however, IB reported better–than-expected profits of INR 254 million."
"Our revised consolidated EPS (excluding insurance) now stands at INR 31.9 for FY09E and INR 39.1 for FY10E. The stock is trading at 15x FY10E earnings and 2.3x FY10E book. Our SOTP fair value for the stock, based on FY10 estimates, is Rs 1003 per share. We maintain our ‘BUY’ recommendation," says Edelweiss.
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Source: Moneycontrol.com
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