
01/05/2024
IIFL Securities retains 'sell' rating on Kotak Mahindra Bank stock as Joint MD exits RBI-hit lender
While the Kotak Mahindra Bank stock has underperformed 18% over the last one year, analysts at IIFL Securities still find its valuations expensive compared to others
A week after stringent action from the Reserve Bank of India (RBI) on new credit card issuances, there is yet another negative surprise for Kotak Mahindra Bank as Joint Managing Director KVS Manian tendered his resignation with immediate effect. He got elevated at the Mumbai-headquartered lender two months ago.
Following this, IIFL Securities retained a 'sell' rating on Kotak Mahindra Bank and shared a target price of Rs 1,800 per share. While the stock has underperformed 18 percent over the last one year, analysts still find its valuations expensive against peers.
"We find valuation of 2.5x core P/B and PEG ratio of 1.5 (versus 0.6-1.2 for peers) still expensive in the context of structurally lower ROAs. With the new CEO appointment, we would be watchful of any senior management exits," the brokerage firm said.