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What brokerage firms expect from Kotak Mahindra Bank and ICICI Bank?

Our Bureau Chennai | Updated on October 21, 2019 Published on October 21, 2019

Kotak Mahindra Bank   -  Bloomberg

Leading private banking majors and index heavyweights Kotak Mahindra Bank and ICICI Bank will declare their second quarter results of the current fiscal on Tuesday. With HDFC Bank coming out strong numbers, most market participants expect other private banks to perform well.

Elara Securities expects ICICI Bank to report a whopping 165 per cent jump in adjusted net profit to Rs 2,409 crore as against year-ago's Rs 908.90 crore. However, the broking house expects its topline to grow at a modest 17 per cent at Rs 11,204.30 crore.

For Kotak Mahindra, Elara expects, a topline growth of 16.5 per cent y-o-y at Rs 4,536.80 crore and 39 per cent jump in adjusted net profit toat Rs 1,586.40 crore.

HDFC Securities although expects Kotak Mahindra Bank to deliver yet another quarter of steady performance across parameters and see definitive RoAE expansion (due to tax cuts), the broking house has retained its neutral rating on the stock, as "valuations seem rich".

With tax benefits, net earnings are expected to grow at about 30 per cent, it said and added comments on the mandated reduction in the promoter’s stake, is one of the crucial factor to watch.

On the other hand, HDFC Securities says ICICI Bank's net earnings at Rs 780 crore, as the broking firm expects deferred tax asset (DTA) to impact it significantly. However, it does not see any 'significant stress' going forward for ICICI Bank.

Kotak Securities expect adjusted PAT decline 73 per cent at Rs 245.20 crore but topline to grow 24 per cent at Rs 7,979.70 crore.

Prabhudas Lilladhar believes ICICI Bank will likely be outlier with lower asset quality issues with steady slippages and very limited additions to stress book; and tax cuts to benefit Kotak Bank’s ROE to some extent. It expects ICICI Bank's PAT to drop significantly by 97 per cent, and however, for Kotak Bank's profit to jump 35 per cent.

Published on October 21, 2019
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