Kotak Mahindra Bank, ICICI Bank, Paytm: Check brokerages' outlook and share price targets post Q2 results
Produced by: Tarun Mishra
Designed by: Manoj Kumar
In the world of finance, ratings and targets from top analysts shape the outlook for businesses. Let's dive into recent updates on Kotak Mahindra Bank, ICICI Bank, and Paytm from leading global brokerages.
Financial Ratings and Targets
CLSA keeps its 'outperform' rating on Kotak Mahindra Bank with a new target of Rs 2,050 per share, slightly down from Rs 2,200. According to CLSA, FY24 profit estimates have been raised by 6%, with FY25 projections remaining mostly unchanged. However, FY26 estimates have been reduced by 7% due to the expected normalisation of credit costs. Despite the surprise of sharp NIM (Net Interest Margin) compression, loan growth remains on track, with the underlying drivers remaining consistent.
Kotak Mahindra Bank - CLSA
Morgan Stanley maintains an 'equal-weight' rating with a target of Rs 2,250. They highlight the bank's strong asset quality, growth, and profitability. Q2 performance aligns with estimates, and they make adjustments to profit estimates for FY24 and FY26.
Kotak Mahindra Bank - Morgan Stanley
CLSA reaffirms a 'buy' rating for ICICI Bank with a target of Rs 1,225. They emphasize the bank's strong growth and express no concerns about unsecured loans.
ICICI Bank - CLSA
Morgan Stanley maintains an 'overweight' rating on ICICI Bank with a target of Rs 1,350. They commend ICICI Bank's robust balance sheet growth in loans and deposits. NIMs are normalizing, but steady-state RoE remains strong.
ICICI Bank - Morgan Stanley
ICICI Bank maintains a run-rate RoA (Return on Assets) of 2.2% and RoE (Return on Equity) of 18%, surpassing its peers. Despite muted returns over the past year, the stock is deemed reasonable with a PE/PB ratio of 13x/2.1x for FY25 (adjusted for subsidiaries).
ICICI Bank's Financial Metrics
Bernstein has given an 'outperform' rating for Paytm with a target of Rs 1,100. They highlight the company's healthy payment growth and stable margins. Lending disbursal growth, especially for postpaid loans, is also strong.
Paytm - Bernstein
According to Bernstein, the payment sector continues to display robust growth, with net payment margins sustaining at 16 bps. Year-over-year lending disbursal growth exceeded 120%, driven by a significant upswing in merchant lending and postpaid loans. However, personal loans witnessed more subdued growth. Additionally, there is an overall enhancement in EBITDA margins, primarily attributed to a greater contribution from lending revenues. Moreover, there has been a quarter-over-quarter stabilisation of non-direct expenses, marking a positive trend in the company's financial performance.
Paytm's Lending and EBITDA
