KOTAKBANK - Fundamental Analysis

Last Updated Time : 02 Aug 25, 12:58 am

Fundamental Rating: 4.0

Here’s a full-spectrum analysis of Kotak Mahindra Bank Ltd (KOTAKBANK)

📊 Core Financials

Profitability

EPS of ₹96.3 is strong, supported by a solid ROE of 15.4%.

ROCE at 8.17% is modest for a bank, reflecting lower capital efficiency.

PAT dipped slightly from ₹4,933 Cr to ₹4,472 Cr — a 2.35% decline, possibly due to margin compression

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Debt & Liquidity

Debt-to-equity ratio of 3.76 — typical for banks, but high compared to non-financials.

Dividend yield of 0.13% — minimal, suggesting reinvestment focus.

📈 Valuation Metrics

Metric Value Remarks

P/E Ratio 20.5 Above industry average (12.6) — slightly overvalued

P/B Ratio ~2.49 Based on Book Value ₹792 — reasonable

PEG Ratio 0.92 Attractive — growth justifies valuation

Intrinsic Value ₹1,650–₹1,750 (est.) Current price slightly above fair value zone

🧠 Business Model & Competitive Edge

Model: Full-service private sector bank with diversified segments — retail, corporate, treasury, insurance, and asset management.

Strengths

Strong brand and digital banking capabilities

Healthy loan and deposit growth — advances up 14%, deposits up 15% YoY

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Stable asset quality — GNPA at 1.48%

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Challenges

Net interest margin (NIM) compression due to floating rate exposure

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Weak Q1 results led to a 7.22% stock drop, reflecting investor concern

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📉 Technical & Sentiment Indicators

RSI at 27.2 — oversold zone, potential for technical rebound

MACD negative at -28.1 — bearish momentum

DMA50 and DMA200 above current price — short-term downtrend

FII holding down (-0.31%), DII holding up (+0.48%) — mixed sentiment

🎯 Entry Zone & Long-Term View

Suggested Entry Zone: ₹1,925–₹1,960 — near RSI support and recent lows

Stop Loss: ₹1,875 (daily close)

Targets: ₹2,050 short-term, ₹2,200 medium-term

Long-Term Holding: Solid pick for conservative investors. Strong fundamentals, digital edge, and diversified revenue streams make it a viable 3–5 year compounder if margins stabilize.

Want to compare it with HDFC Bank or ICICI Bank to see how Kotak stacks up in the private banking space? I can pull that up for you.

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