Kotak Bank - 1QFY21 results - Jaikishan Parmar, Sr. Equity Research Analyst, Angel Broking Ltd.

"For Q1FY21, Kotak Bank PAT declined 9% YoY to 1244cr which is marginally lower than the street estimate. Advance declined 2% YoY, primarily owing to a plunge in the growth of SME and other advances. However, Tractor finance grew at a healthy rate of 15% YoY. NII grew 18% YoY, while other income reduced 41% YoY. Controlled opex helped the bank to report a 9% jump in Pre provision profit, however, Rs.616cr COVID led provision impacted PBT which declined 20% YoY and due to lower tax PAT reduced by 9% YoY. Moratorium 2 is at 9.65% of the loan book as on Q1FY21. This included 9.15% from Moratorium 1. The 80% of moratorium 2 book is secured. Total COVID related provisions as Q1FY21 stand at Rs.1,266 crore (0.62% of net advances).GNPA and NPA deteriorated YoY and QoQ, due to higher slippages. Capital adequacy ratio stands at 21.2% and the Tier I ratio is 20.6%. During the quarter, the Bank raised Rs.7,442 crore through a QIP issuance of 6.5 crore equity shares. Kotak Bank trades at higher valuation owing to quality growth, however, in this subdued economic activity, advance growth to reduce and asset quality would be impacted negatively. Hence, stock price is likely to consolidate till investors get better clarity on asset quality post moratorium 2 complete."

Shares of KOTAK MAHINDRA BANK LTD. was last trading in BSE at Rs.1322.45 as compared to the previous close of Rs. 1349.9. The total number of shares traded during the day was 257035 in over 13339 trades.

The stock hit an intraday high of Rs. 1379.35 and intraday low of 1311. The net turnover during the day was Rs. 344409949.

Source : Equity Bulls

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