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Kotak Bank share falls over 2% post Q3 earnings

BusinessToday.In     January 27, 2021

Kotak Mahindra Bank share fell 2.6% in early trade even after the private sector lender reported a 16.1% YoY growth in profit at Rs 1,853.5 crore for the quarter ended December 2020 against a profit of Rs 1,596 crore in a year-ago period.

Net interest income of the lender rose 16.8% YoY to Rs 4,007 crore in Q3FY21 as compared to Rs 3,430 crore in the same period last year.

At the end of December 2020, the bank's advances stood at Rs 2,14,103 crore, down 1.2% as compared to Rs 2,16,774 crore as of December 2019. However, advances rose 4.5% sequentially. Deposits grew 10.8% YoY and 1.4% QoQ to Rs 2,65,304 crore.

In the last 5 days, the stock has eroded 6.7% value.

The stock of Kotak Bank opened at Rs 1798 and hit day's high of Rs 1823.05 in early session. Later, the stock fell 2.6% to day's low of Rs 1747.30 against the last close of Rs 1795.15.

Kotak Bank stock trades higher than 100 and 200-day moving averages but lower than 5, 20, 50-day moving averages.

The share has fallen 6% in one week and 9.9% in a month. Year-to-date, the stock is down 11%.

Market capitalisation of the lender in the closing session today stood at Rs 3,49,891.18 crore. The stock has touched a 52-week high of Rs 2,026.55 and a 52-week low of Rs 1,000.35. Share of the private lender, with Rs 2 face value has risen 9.1% in one year.  

Meanwhile, the private banking index was down 2.7% on BSE. Broader market indices Sensex and Nifty made another reversal after the opening bell and fell for the fourth session on Wednesday, amid mixed global equities. Sensex ended 937 points lower at 47,409 and Nifty fell 271 points to 13,967.

On Kotak Bank, brokerage UBS maintained a 'sell 'call on the stock with a target of Rs 1,700 per share and said that the management is confident on profitability but the positives have already been priced in the stock value. It added the company reduced the credit cost estimate to 1.4% from 1.5% earlier and its loan growth to 3% in FY21 from 5%.

Morgan Stanley said Q3 estimates were largely missed due to one-time interest income reversals and said that Kotak Bank's Pre-provision operating profit (PPOP) growth should remain strong. The brokerage is 'equal weight' on the stock with a target at Rs 2,025 per share. It expects the lender's asset quality to normalise hereon and focus on loan growth to sustain.

Kotak Bank shares closed 1.58% lower at Rs 1,766.

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