NEUTRAL Mahindra Bank - 1QFY20 - HDFC sec... · slowest in 2 years (yet ahead of system), dragged by moderate corp & biz loan growth (+7%). Slower growth has been a recurring theme

RESULTS REVIEW 1QFY20 23 JULY 2019

Kotak Mahindra Bank NEUTRAL

Great, but dearKMB reported an in line 1Q, with higher NIMs, slower growth and stable asset quality. With limited upside in sight, we DOWNGRADE to NEUTRAL with a TP of Rs 1,531 (4.25x Jun-21E core ABV of Rs 283 + Rs 328 for subs). HIGHLIGTHS OF THE QUARTER Loan Growth Dips: At ~18%, loan growth was the

slowest in 2 years (yet ahead of system), dragged by moderate corp & biz loan growth (+7%). Slower growth has been a recurring theme across PVT banks in 1Q. Healthy growth trends continued in mortgages (+24/4%) and PL/CC and small biz loans (+29/2%). Strong franchise (esp. liabilities), adequate capital (CAR at ~17.8%) and dwindling competition augur well for sustainable system-beating growth. We have assumed a loan growth of ~21% over FY 20-21E.

NIMs Rise: Margin expansion to ~4.5% (+19bps YoY) can be attributed to (1) Better pricing, (2) Faster growth in higher yielding segments and (3) A cut in SA deposit rates (by 50bps below 0.1mn in Jun-19). High CAR provides amplifies NIMs. Our NIM estimates remain unchanged at 4.25% over FY20-21E.

Asset Quality: KMB’s asset quality was stable with G/NNPAs at 2.19/0.73%. Slippages at ~Rs 7.5bn (1.45% ann. +2.3x/-18% YoY/QoQ) were led by some stress in the mid-market segment. Sequentially higher NPA provisions (Rs 2.7bn, +14%) restrained NNPAs to ~73bps and drove PCR ~610/150bps to ~67%. Commentary indicates better performance of the agri portfolio (vs. peers). Limited exposure to stressed sectors and conservative lending practices limit worries on asset quality.

STANCE

Inherent strengths (strong liability franchise, limited exposure to stressed sectors and a calibrated approach to growth) position KMB to deliver sustainably, even in times of economic uncertainty. However, a limited upside forces us to DOWNGRADE to NEUTRAL with a TP of Rs 1,531 (4.25x Jun-21E core ABV of Rs 283 + Rs 328 for subs). The issue on promoter holding with the regulator remains unresolved (next hearing in CY20).

FINANCIAL SUMMARY Standalone (Rs mn) 1QFY20 1QFY19 YoY (%) 4QFY19 QoQ (%) FY19 FY20E FY21E FY22E Net Interest Income 31,730 25,829 22.8% 30,479 4.1% 112,590 134,213 159,496 188,991 PPOP 23,989 20,325 18.0% 22,823 5.1% 83,482 103,763 123,848 147,897 PAT 13,602 10,249 32.7% 14,078 -3.4% 48,653 59,616 71,936 86,634 EPS (Rs) 7.1 5.4 32.5% 7.4 -3.4% 25.5 31.2 37.7 45.4 Core ROAE (%) 13.0 13.7 14.3 15.0 Core ROAA (%) 1.70 1.77 1.80 1.84 Core Adj. BVPS (Rs) 201 238 273 313 P/E (x)# 44.9 37.2 30.1 24.4 P/ABV (x)# 5.70 4.89 4.15 3.53 Source: Bank, HDFC sec Inst Research; Note: # adjusted for embedded value of subs.

INDUSTRY BANKS CMP (as on 22 Jul 2019) Rs 1,454 Target Price Rs 1,531 Nifty 11,346 Sensex 38,031 KEY STOCK DATA Bloomberg KMB IN No. of Shares (mn) 1,909 MCap (Rs bn) / ($ mn) 2,777/40,280 6m avg traded value (Rs mn) 4,812 STOCK PERFORMANCE (%) 52 Week high / low Rs 1,556/1,002 3M 6M 12M Absolute (%) 7.2 12.6 9.1 Relative (%) 8.8 8.2 4.9 SHAREHOLDING PATTERN (%) Mar-19 June-19 Promoters 30 30 FIs & Local MFs 10 11.5 FPIs 43.4 40.5 Public & Others 16.6 18 Pledged Shares Nil Nil Source : BSE

Darpin Shah [email protected] +91-22-6171-7328 Aakash Dattani [email protected] +91-22-6171-7337

HDFC securities Institutional Research is also available on Bloomberg HSLB <GO> & Thomson Reuters

KOTAK MAHINDRA BANK : RESULTS REVIEW 1QFY20

Liabilities’ Growth Healthy: Deposit traction (+23/3%) was healthy, with sequential growth driven by TDs (+7%, similar trends seen at peers in 1Q, so far). As CASA deposit were sequentially flat (+24% YoY), their share dipped ~180bps QoQ to 50.7%. SA growth (+23/2%) did not seem to be impacted by the rate cut in Jun-19 (preceded by a rate cut in 4Q as well). More conducive e-KYC norms (likely fresh legislative output) and the resumption of 811 will boost SA mobilization (albeit smaller and less sticky).

Exposure To Precarious Sectors: Exposure to NBFCs, CRE and LRD was sequentially stable at ~Rs 203bn (~9.8%). Management remains cautious on lending to these sectors.

Scope for Improvement in Oplev: Opex grew ~21/2% driven by a ~25/5% rise in staff costs (higher retirement benefit provisions as bond yields fell) while other opex grew ~18% (flat QoQ). Strong

sequential growth in operating income (+4%) resulted in a ~70bps drop in the C-I ratio to 46.4%. Successful implementation of 811, driving digital customer acquisitions (cost ~20% lower) provides scope for sharp improvement in operating efficiency. We have baked in a C-I ratio improvement of ~350bps to ~44% over FY19-21E.

Subsidiaries: The subs’ profits fell marginally QoQ. KMP’s advances (Rs 277bn) were flat (YoY and QoQ) with a 4% drop in core car loans. The continuance of this trend over a long period remains inexplicable. KMP witnessed a ~38/20% rise in NNPAs (54bps). Kotak Mahindra Capital’s PAT nearly doubled YoY/QoQ to ~Rs 450mn resulting from a string of capital mkt deals in 1Q. K-AMC reported avg AUMs of ~Rs 1.61tn (+17% over FY19 levels) and registered a PAT of ~Rs 730 mn (flat QoQ). K-sec’s net earnings were flat QoQ (down 15% YoY) with 4% rise in total income (flat YoY)

SOTP

Rs bn Per Share Rationale Kotak Mahindra Bank – Standalone 2,295.4 1,202.6 4.25x June-21E core ABV of Rs 283 Kotak Mahindra Prime - Car Finance 238.9 125.2 3.0x June-21E core NW Kotak Mahindra Investments – LAS 63.7 33.4 3.0x June-21E core NW Kotak Securities – Broking 58.0 30.4 15x June-21E Earnings Kotak Mahindra AMC - Asset Management 98.1 51.4 6% of FY21E AUM Kotak Life - Life Insurance 289.8 151.8 FY20 EV + 20x FY21E VNB KMCC - Investment Banking 8.8 4.6 1.5x June-21E core NW Kotak Alternative Assets 9.1 4.8 7.5% of FY21E AUM Offshore Funds 16.8 8.8 5% of FY21E AUM Total Value of Subsidiaries 783 410.3 Less : 20% Holding Co. Discount 156.6 82.1 Total SOTP Value 2,921.9 1,530.8 Current Value 2,775.3 1,454.0 Upside (%) 5.3 5.3 Source: HDFC sec Inst Research

Page | 2


Five Quarters At A Glance

Source: HDFC sec Inst Research

Rs mn 1QFY19 2QFY19 3QFY19 4QFY19 1QFY20 YoY Growth QoQ Growth Net Interest Income 25,829 26,891 29,391 30,479 31,730 22.8% 4.1% Non Interest Income 11,646 12,053 9,639 12,703 13,047 12.0% 2.7% Fee Income 9,890 10,190 10,380 11,870 11,500 16.3% -3.1% Operating Income 37,475 38,944 39,030 43,182 44,778 19.5% 3.7% Operating Expenses 17,150 17,994 19,646 20,359 20,789 21.2% 2.1% Pre provision Profits 20,325 20,950 19,384 22,823 23,989 18.0% 5.1% Provisions 4,696 3,538 (323) 1,713 3,168 -32.6% 85.0%

NPA Provisions 2,600 2,213 2,550 2,397 2,726 4.8% 13.7% PBT 15,629 17,412 19,707 21,110 20,822 33.2% -1.4% Provision For Tax 5,380 5,995 6,798 7,032 7,220 34.2% 2.7% PAT 10,249 11,417 12,909 14,078 13,602 32.7% -3.4% Balance Sheet items/ratios Deposits (Rs bn) 1,897 2,058 2,138 2,259 2,329 22.8% 3.1%

CASA (%) 50.3 50.2 50.7 52.5 50.7 45 bps -179 bps Advances (Rs bn) 1,769 1,849 1,964 2,057 2,080 17.6% 1.1%

CV And CE (%) 9.1 9.2 9.2 9.6 9.6 51 bps -1 bps Agri Finance (%) 12.0 12.1 12.1 13.1 12.5 48 bps -63 bps Mortgage Loans (%) 19.2 19.5 19.5 19.8 20.3 109 bps 51 bps Small bus. PL/CC (%) 14.8 15.7 15.8 16.1 16.2 139 bps 9 bps Corp + Business Banking (%) 42.8 41.4 41.2 38.9 39.1 -370 bps 19 bps Others (%) 2.1 2.0 2.2 2.4 2.3 23 bps -15 bps

CD ratio (%) 93.2 89.9 91.9 91.1 89.3 -394 bps -175 bps CAR (%) 18.3 18.0 18.1 17.5 17.8 -50 bps 30 bps

Tier I (%) 17.6 17.4 17.6 16.9 17.3 -30 bps 40 bps Profitability Calc. Yield On Advances (%) 9.62 9.86 10.00 9.90 10.03 41 bps 13 bps Calc. Cost Of Funds (%) 5.25 5.41 5.50 5.36 5.35 10 bps 0 bps NIM (%) 4.30 4.20 4.33 4.48 4.49 19 bps 1 bps Cost-Income Ratio (%) 45.8 46.2 50.3 47.1 46.4 66 bps -72 bps Tax Rate (%) 34.4 34.4 34.5 33.3 34.7 25 bps 136 bps Asset Quality Gross NPA (Rs bn) 38.99 40.33 41.29 44.7 46.1 18.3% 3.3% Net NPA (Rs bn) 15.27 15.01 13.97 15.4 15.2 -0.2% -1.3% Gross NPAs (%) 2.17 2.15 2.07 2.14 2.19 2 bps 5 bps Net NPAs (%) 0.86 0.81 0.71 0.75 0.73 -13 bps -2 bps Slippages (% ann.) 0.74 0.93 0.72 1.81 1.45 71 bps -36 bps Coverage Ratio (%) 60.8 62.8 66.2 65.4 67.0 612 bps 152 bps SMA II (%) 0.11 0.09 0.18 0.07 0.16 5 bps 9 bps

Overall growth dragged by slower growth in the corporate and business banking segments (+7%), while other segments grew in excess of ~20%

CASA grew ~24% YoY, led by a 27/22% rise in SA/CA

LLPs at 53bps vs. 48bps QoQ

Slippages at Rs 7.5bn (+2.3x/-18%) and reductions at ~Rs 6bn (+2.5x/6%); agri portfolio is performing better vs. peers

SMA II (Rs 3.3bn) jumped to QoQ, a 1Q phenomenon

Driven by ~18% loan growth and ~20bps rise in NIMs (4.49%)

The fall in yields resulted in higher retirement benefit provisions, staff costs thus rose ~25/5%

SA rate cut and better pricing power contributed to NIM expansion; as full impact of the rate cut sets in further expansion can be expected

Treasury gains jumped ~87% QoQ while fees dipped (a 1Q phenomenon)

Page | 3


Standalone Advances Grew 18/1% YoY/QoQ Consol Advances Grew ~15/1% YoY/QoQ

Source: Company, HDFC sec Inst Research; Source: Company, HDFC sec Inst Research

Standalone Book Composition: Share Of Small Businesses/PL/CC Continues To Rise (%) 4QFY16 1QFY17 2QFY17 3QFY17 4QFY17 1QFY18 2QFY18 3QFY18 4QFY18 1QFY19 2QFY19 3QFY19 4QFY19 1QFY20

CV/CE 6.3 6.6 7.3 7.5 8.0 8.0 8.0 8.3 9.0 9.1 9.2 9.2 9.6 9.6 Agri 15.2 13.9 13.7 12.8 13.9 13.0 12.9 12.9 13.5 12.0 12.1 12.1 13.1 12.5 Mortgage 19.4 19.4 19.4 19.4 19.2 19.3 19.3 19.5 19.1 19.2 19.5 19.5 19.8 20.3 Small Biz/PL/CC 12.6 12.2 12.6 12.2 12.8 12.8 13.7 14.4 14.8 14.8 15.7 15.8 16.1 16.2

Corp + Biz Banking 44.6 45.6 44.5 45.8 43.8 44.7 44.0 42.7 41.5 42.8 41.4 41.2 38.9 39.1

Others 1.9 2.3 2.5 2.4 2.3 2.2 2.1 2.2 2.1 2.1 2.0 2.2 2.4 2.3

Consol. Book Composition: Share of Mortgages Rises QoQ (%) 4QFY16 1QFY17 2QFY17 3QFY17 4QFY17 1QFY18 2QFY18 3QFY18 4QFY18 1QFY19 2QFY19 3QFY19 4QFY19 1QFY20

CV /CE 5.2 5.4 5.9 6.1 6.5 6.5 6.5 6.8 7.4 7.5 7.7 7.7 8.1 8.1 Agri 12.4 11.4 11.2 10.5 11.4 10.6 10.5 10.5 11.1 10.0 10.1 10.2 11.1 10.6 Auto 11.5 11.4 11.3 11.1 11.0 10.5 10.6 10.2 9.8 9.5 9.4 8.7 8.3 8.0

Mortgage 15.9 16.0 15.9 15.9 15.6 15.6 15.7 15.8 15.7 15.9 16.2 16.5 16.7 17.2 Small Biz/PL/CC 10.3 10.0 10.3 10.0 10.4 10.4 11.1 11.7 12.2 12.3 13.1 13.4 13.6 13.8

Corp + Biz Banking 40.0 40.6 40.0 41.1 39.6 39.9 39.7 38.9 38.2 39.5 38.7 38.8 37.1 37.6

Others 4.6 5.1 5.3 5.3 5.6 6.4 5.8 6.0 5.6 5.2 4.9 4.7 5.1 4.7 Source: Company, HDFC sec Inst Research

Slower growth in the corp & business banking segment (+7%) dragged overall growth Other segments continue to grow at a healthy rate (22-29%) Amongst the agri loans, KMB continues to gain M-share through tractors; Mgmt has been cautious on crop loans The mgt guides for loan growth of ~20% We have factored 21% loan CAGR over FY20-21E KMP’s book dipped 1/2% YoY/QoQ KMI’s (LAS) book to dipped ~2% QoQ (+17% YoY)

1,03

6 1,

117

1,15

3 1,

187

1,20

8 1,

260

1,29

3 1,

361

1,42

4 1,

526

1,59

1 1,

697

1,76

9 1,

849

1,96

4 2,

057

2,08

0

-

5.0

10.0

15.0

20.0

25.0

30.0

-

500

1,000

1,500

2,000

2,500

1QFY

162Q

FY16

3QFY

164Q

FY16

1QFY

172Q

FY17

3QFY

174Q

FY17

1QFY

182Q

FY18

3QFY

184Q

FY18

1QFY

192Q

FY19

3QFY

194Q

FY19

1QFY

20

Stanalone Loans YoY (%) - RHSRs bn

1,25

51,

347

1,41

11,

448

1,47

01,

541

1,57

81,

671

1,75

51,

878

1,95

72,

060

2,13

42,

222

2,32

82,

435

2,45

0

-

5.0

10.0

15.0

20.0

25.0

30.0

0

500

1,000

1,500

2,000

2,500

3,000

1QFY

162Q

FY16

3QFY

164Q

FY16

1QFY

172Q

FY17

3QFY

174Q

FY17

1QFY

182Q

FY18

3QFY

184Q

FY18

1QFY

192Q

FY19

3QFY

194Q

FY19

1QFY

20

Consol Loans YoY (%) - RHSRs bn

Page | 4


KMP Book: Total Advances Dip 2% QoQ LAS Customer Assets: Jumps 17% YoY

Source: Bank, HDFC sec Inst Research Source: Bank, HDFC sec Inst Research

Deposit Growth: ~23/3% YoY/QoQ CASA Grew 24% Led By CA (+27%)

Source: Bank, HDFC sec Inst Research; Source: Bank, HDFC sec Inst Research

Deposits Break-up : Strong QoQ TD Growth Supresses CASA Ratio (%) 4QFY16 1QFY17 2QFY17 3QFY17 4QFY17 1QFY18 2QFY18 3QFY18 4QFY18 1QFY19 2QFY19 3QFY19 4QFY19 1QFY20 CA 16.8 15.6 15.6 16.2 17.6 17.0 15.5 14.3 16.7 15.1 15.0 14.8 17.2 15.7 SA 21.3 21.8 23.4 25.8 26.4 26.9 32.3 32.3 34.0 35.1 35.3 35.9 35.3 35.0 TD 57.9 55.9 61.0 58.0 56.0 49.3 52.2 53.3 49.2 49.7 49.8 49.3 47.5 49.3 Source: Company, HDFC sec Inst Research

KMP’s car loan book shrank ~4% YoY/QoQ each while other advances jumped ~9/2% YoY/QoQ SA growth was healthy at ~22/2% YoY/QoQ (after a 4% QoQ rise in 4Q) CA dipped ~6% QoQ (after a ~23% QoQ rise in 4Q) CASA Ratio dipped ~180bps QoQ to 50.7% (highest amongst peers, nevertheless) as TDs grew ~7% QoQ, while CASA deposits were flat Sweep deposits formed 7% of the total deposits (+50bps QoQ) Avg CA grew ~23% and SA grew ~21% CASA and TD below Rs 50mn constituted ~82% (vs. 79% YoY and 81% QoQ) of total deposits More conducive e-KYC norms (fresh legislative output) and the resumption of 811 will boost SA mobilization

(10.0)(5.0)-5.0 10.0 15.0 20.0 25.0 30.0

050

100150200250300350

1QFY

162Q

FY16

3QFY

164Q

FY16

1QFY

172Q

FY17

3QFY

174Q

FY17

1QFY

182Q

FY18

3QFY

184Q

FY18

1QFY

192Q

FY19

3QFY

194Q

FY19

1QFY

20

Total Loans Car Loans Total Loans YoY - RHS Car Loans YoY - RHS

Rs bn %

34.3

40

.2

47.6

48

.0

48.7

55

.3

59.6

69.1

65

.0

72.3

77

.6

79.0

77

.1

79.6

79

.2 92

.4

90.3

-10.0 20.0 30.0 40.0 50.0 60.0 70.0 80.0 90.0

100.0

1QFY

162Q

FY16

3QFY

164Q

FY16

1QFY

172Q

FY17

3QFY

174Q

FY17

1QFY

182Q

FY18

3QFY

184Q

FY18

1QFY

192Q

FY19

3QFY

194Q

FY19

1QFY

20

Rs bn

1,16

81,

232

1,30

91,

386

1,40

01,

410

1,49

41,

574

1,63

51,

657

1,80

81,

926

1,89

72,

058

2,13

82,

259

2,32

9

-

5.0

10.0

15.0

20.0

25.0

30.0

0

500

1,000

1,500

2,000

2,500

1QFY

162Q

FY16

3QFY

164Q

FY16

1QFY

172Q

FY17

3QFY

174Q

FY17

1QFY

182Q

FY18

3QFY

184Q

FY18

1QFY

192Q

FY19

3QFY

194Q

FY19

1QFY

20

Deposits YoY (%) - RHSRs bn

401

447

462

528

524

550 628

693

718 792

844 97

8 95

4 1,

034

1,08

4 1,

186

1,18

1

-

10.0

20.0

30.0

40.0

50.0

-

200

400

600

800

1,000

1,200

1,400

1QFY

162Q

FY16

3QFY

164Q

FY16

1QFY

172Q

FY17

3QFY

174Q

FY17

1QFY

182Q

FY18

3QFY

184Q

FY18

1QFY

192Q

FY19

3QFY

194Q

FY19

1QFY

20

CASA YoY (%) - RHSRs bn

Page | 5


NIM Healthy, ~At 4.5%, +20bps YoY Fees Grew ~16% YoY

Source: Bank, HDFC sec Inst Research Source: Bank, HDFC sec Inst Research

Non-Interest Income: Fees Dip 3% QoQ and Treasury Gains jump ~87% QoQ Rs mn 4QFY16 1QFY17 2QFY17 3QFY17 4QFY17 1QFY18 2QFY18 3QFY18 4QFY18 1QFY19 2QFY19 3QFY19 4QFY19 1QFY20

Fees 6,100 5,640 6,300 7,250 7,570 8,050 8,100 8,290 10,100 9,890 10,190 10,380 11,870 11,500

% Of loans 2.09 1.88 2.04 2.27 2.28 2.31 2.20 2.13 2.46 2.28 2.25 2.18 2.36 2.22

Total 6,819 7,332 8,311 9,102 10,030 9,070 9,540 10,400 11,510 11,650 12,050 9,640 12,703 13,050

% of Total inc 26.9 27.6 29.4 30.7 31.7 28.8 29.2 30.3 30.8 31.1 30.9 24.7 29.4 29.1 % of Avg. Assets 1.46 1.54 1.73 1.83 1.93 1.65 1.65 1.71 1.79 1.74 1.72 1.14 1.45 1.66

Source: Bank, HDFC sec Inst Research

Cost of SA dipped 15bps QoQ to 5.51% as KMB cut SA rates on deposits below Rs 0.1mn by 50bps in Jun-19 The impact on the CoD will be more noticeable in 2Q Better pricing power and a cut in SA rates drove NIMs ~20bps YoY to ~4.5% The mgt expects better pricing power in certain high yielding segments Fees as a % of avg. advances dipped ~14bps QoQ to ~2.2%, a 1Q phenomenon

4.0

4.1

4.2

4.3

4.4

4.5

4.6

4.7

-2.0 4.0 6.0 8.0

10.0 12.0 14.0 16.0

1QFY

162Q

FY16

3QFY

164Q

FY16

1QFY

172Q

FY17

3QFY

174Q

FY17

1QFY

182Q

FY18

3QFY

184Q

FY18

1QFY

192Q

FY19

3QFY

194Q

FY19

1QFY

20

Calc YoA Calc CoF NIM RHS% %

-

0.5

1.0

1.5

2.0

2.5

3.0

0.0

2.0

4.0

6.0

8.0

10.0

12.0

14.0

1QFY

162Q

FY16

3QFY

164Q

FY16

1QFY

172Q

FY17

3QFY

174Q

FY17

1QFY

182Q

FY18

3QFY

184Q

FY18

1QFY

192Q

FY19

3QFY

194Q

FY19

1QFY

20

Fee income (Rs bn) % of loans (RHS)

Page | 6


Standalone Asset Quality Stable QoQ Consol Asset Quality: Marginal Deterioration

Source : Bank, HDFC sec Inst Research Source: Bank, HDFC sec Inst Research Subs’ NNPAs Spike QoQ

Source : Bank, HDFC sec Inst Research

Standalone GNPAs were ~Rs 46.1bn (i.e. 2.19%), +3% QoQ Slippages were Rs 7.5bn (145bps vs. 181bps QoQ) Commentary indicayes The SMA-II book stood at a mere ~Rs 3.3bn (16bps vs. 7bps QoQ, the QoQ rise being a 1Q phenomenon) KMP’s NNPAs jumped 20% QoQ to ~0.54% KMI’s NNPAs were ~64bps (Rs 578mn, +2.2x QoQ)

-

0.5

1.0

1.5

2.0

2.5

3.0

-5.0

10.0 15.0 20.0 25.0 30.0 35.0 40.0 45.0 50.0

1QFY

162Q

FY16

3QFY

164Q

FY16

1QFY

172Q

FY17

3QFY

174Q

FY17

1QFY

182Q

FY18

3QFY

184Q

FY18

1QFY

192Q

FY19

3QFY

194Q

FY19

1QFY

20

GNPA (LHS) NNPA (LHS)GNPA (%) NNPA (%)Rs bn %

-

0.5

1.0

1.5

2.0

2.5

-

10.0

20.0

30.0

40.0

50.0

60.0

1QFY

162Q

FY16

3QFY

164Q

FY16

1QFY

172Q

FY17

3QFY

174Q

FY17

1QFY

182Q

FY18

3QFY

184Q

FY18

1QFY

192Q

FY19

3QFY

194Q

FY19

1QFY

20

GNPA (LHS) NNPA (LHS)GNPA (%) NNPA (%)Rs bn %

-

0.1

0.2

0.3

0.4

0.5

0.6

0.7

1QFY

162Q

FY16

3QFY

164Q

FY16

1QFY

172Q

FY17

3QFY

174Q

FY17

1QFY

182Q

FY18

3QFY

184Q

FY18

1QFY

192Q

FY19

3QFY

194Q

FY19

1QFY

20

KMP KMI%

Page | 7


PAT Contribution: Share of Lending Business Rise To ~81.6% From 77% YoY And 80.7% QoQ (%) 4QFY16 1QFY17 2QFY17 3QFY17 4QFY17 1QFY18 2QFY18 3QFY18 4QFY18 1QFY19 2QFY19 3QFY19 4QFY19 1QFY20 PAT Rs bn 10.6 10.7 12.0 12.7 14.0 13.5 14.4 16.2 17.9 15.7 17.5 18.4 20.4 19.3 KMB 66.0 69.5 67.2 69.5 69.5 67.8 69.0 64.8 62.8 65.1 65.4 70.0 69.1 70.4 KMP 12.3 11.2 10.8 10.5 9.5 9.8 10.4 9.1 8.9 8.8 9.0 7.5 8.0 7.9 Invest. Co. (LAS) 4.1 2.9 4.4 3.8 4.0 3.3 3.8 3.1 5.3 3.0 2.6 2.2 3.6 3.3 K Sec 4.8 5.6 7.9 6.7 8.6 9.3 8.2 9.5 7.5 8.3 6.4 5.4 5.4 5.7 Kotak AMC 2.4 1.8 0.6 1.3 0.9 1.1 1.6 2.3 2.2 3.2 3.0 4.1 3.7 3.8 KMCC (IB) 1.6 2.2 0.4 0.6 0.8 0.4 (0.1) 2.2 1.4 1.6 0.8 0.2 1.0 2.3 Kotak Life 7.3 6.7 5.2 5.4 7.2 7.6 6.9 6.0 6.4 7.4 7.3 6.8 6.8 6.9 International Sub. 2.1 1.2 2.6 1.7 1.5 1.3 1.9 2.0 2.1 2.1 2.7 2.0 1.6 1.5 Investment Adv. 0.5 1.0 0.1 (0.7) (0.9) (0.1) (0.1) 0.7 0.1 1.8 0.7 0.6 0.7 0.9 MI (1.0) (2.2) 0.8 1.3 (1.1) (0.5) (1.7) 0.2 3.2 (1.4) 2.2 1.2 0.0 (2.7) Total 100.0 100.0 100.0 100.0 100.0 100.0 100.0 100.0 100.0 100.0 100.0 100.0 100.0 100.0 KMP: Muted Growth; NPAs Spike Rs bn 4QFY16 1QFY17 2QFY17 3QFY17 4QFY17 1QFY18 2QFY18 3QFY18 4QFY18 1QFY19 2QFY19 3QFY19 4QFY19 1QFY20 Total Loans 223 222 233 235 251 276 284 288 280 279 285 279 283 277 YoY (%) 13.0 12.6 16.5 7.4 12.8 24.5 21.7 22.7 11.5 1.0 0.6 (3.1) 0.9 (0.6) Car Loans 167 168 172 173 182 184 198 200 201 204 207 202 203 196 YoY (%) 13.5 11.8 9.5 5.3 8.8 9.1 15.0 15.4 10.6 10.9 4.6 1.1 0.8 (4.0) % of total loans 75.0 75.8 74.0 73.8 72.4 66.5 69.9 69.3 71.8 73.0 72.7 72.4 71.7 70.5 NII 2.5 2.4 2.5 2.6 2.7 2.7 2.8 2.9 2.8 2.7 2.7 2.7 2.9 3.0 YoY (%) (2.0) 3.0 4.2 6.5 7.3 12.4 11.7 8.7 5.7 (0.4) (3.6) (4.2) 4.3 10.3 Calc. NIM (%) 4.5 4.4 4.3 4.5 4.4 4.1 3.9 4.0 3.9 3.9 3.8 3.9 4.2 4.3 Total Income 30.4 29.4 30.8 31.0 33.0 32.9 34.0 34.7 35.4 32.8 35.5 33.0 37.7 36.2 YoY (%) (1.6) 6.1 3.4 4.4 8.6 11.9 10.4 11.9 7.3 (0.3) 4.4 (4.9) 6.5 10.4 PBT 2.0 1.8 2.0 2.0 2.0 2.0 2.3 2.3 2.4 2.1 2.4 2.1 2.4 2.4 YoY (%) (7.8) - 1.5 5.2 1.0 10.9 15.7 11.3 20.2 5.4 3.9 (5.8) (1.6) 9.8 PAT 1.3 1.2 1.3 1.3 1.3 1.3 1.5 1.5 1.6 1.4 1.6 1.4 1.6 1.5 YoY (%) (9.1) 0.8 2.4 5.6 2.3 10.0 15.4 11.3 20.3 5.3 4.7 (6.1) 2.5 10.1 NNPA (Rs mn) 890.5 954.8 979.1 657.0 904.4 995.1 1,163.3 1,152.0 1,036.7 1,088.4 1,141.8 1,200.0 1,243.8 1,498.4 NNPA (%) 0.40 0.43 0.42 0.28 0.36 0.36 0.41 0.40 0.37 0.39 0.40 0.43 0.44 0.54 Source : Bank, HDFC sec Inst Research

Page | 8


Kotak Sec Snapshot: Cash M-Shares Rises YoY to 10%; PAT Flat QoQ Rs mn. 4QFY16 1QFY17 2QFY17 3QFY17 4QFY17 1QFY18 2QFY18 3QFY18 4QFY18 1QFY19 2QFY19 3QFY19 4QFY19 1QFY20 K Sec Vol (bn) 74.0 76.7 73.3 87.4 104.3 109.8 124.1 150.3 158.4 143.7 341.7 380.8 189.0 212.1 Market Share (%) 2.3 2.4 2.3 2.2 2.2 1.9 1.9 2.0 1.9 1.7 2.5 2.9 2.6 1.7 Total Income 2,250 2,380 2,940 2,870 3,660 3,650 3,510 4,520 4,480 4,150 4,070 3,630 3,960 4,110 YoY (%) (22.1) (4.8) 8.9 25.9 62.7 53.4 19.4 57.5 22.4 13.7 16.0 (19.7) (11.6) (1.0) Yield (calc.) 0.05 0.05 0.07 0.05 0.06 0.06 0.05 0.05 0.05 0.05 0.02 0.02 0.03 0.03 PBT 750 920 1,440 1,250 1,820 1,870 1,770 2,310 2,010 1,960 1,690 1,490 1,650 1,680 YoY (%) (49.0) (9.8) 20.0 50.6 142.7 103.3 22.9 84.8 10.4 4.8 (4.5) (35.5) (17.9) (14.3) PAT 510 600 960 850 1,210 1,250 1,180 1,540 1,340 1,300 1,120 990 1,110 1,100 YoY (%) (46.9) (10.4) 23.1 54.5 137.3 108.3 22.9 81.2 10.7 4.0 (5.1) (35.7) (17.2) (15.4) Kotak AMC Snapshot: AUM Grew ~19/5% and PAT Jumped 43% YoY (Down 3% QoQ) Rs mn 4QFY16 1QFY17 2QFY17 3QFY17 4QFY17 1QFY18 2QFY18 3QFY18 4QFY18 1QFY19 2QFY19 3QFY19 4QFY19 1QFY20 AUM (Rs bn) 1,022 1,109 1,207 1,331 1,413 1,522 1,692 1,829 1,825 1,992 1,994 2,032 2,253 2,368 Debt (%) 38.3 41.1 42.9 44.7 43.1 44.2 41.6 39.2 36.8 40.0 39.0 39.0 39.0 39.0 Equity (%) 14.3 14.5 16.0 16.8 19.6 21.3 23.9 25.6 26.8 26.0 27.0 29.0 28.0 29.0 Alt assets (%) 11.1 10.3 9.0 8.2 5.1 4.3 3.6 3.0 2.7 3.0 3.0 3.0 5.0 5.0 Offshore Funds (%) 20.7 19.0 17.3 16.5 17.4 15.6 16.9 18.0 18.9 17.0 17.0 16.0 14.0 13.0 Insurance (%) 15.2 14.6 14.2 13.0 13.7 13.0 12.3 12.1 12.7 12.0 12.0 12.0 12.0 12.0 PMS (%) 0.4 0.4 0.6 0.8 1.1 1.5 1.7 2.0 2.1 2.0 2.0 1.0 2.0 2.0 PBT 320 290 110 240 200 210 340 570 580 770 790 1150 1160 1110 YoY (%) (300.0) 38.1 (54.2) 84.6 (37.5) (27.6) 209.1 137.5 190.0 266.7 132.4 101.8 100.0 44.2 PAT 250 190 70 160 130 150 230 380 390 510 520 760 750 730 YoY (%) (238.9) (5.0) (69.6) 300.0 (48.0) (21.1) 228.6 137.5 200.0 240.0 126.1 100.0 92.3 43.1 Source : Bank, HDFC sec Inst Research

Page | 9


K M Investment (LAS) Financial Snapshot: NPAs Spike On Sequential Basis Rs mn 4QFY16 1QFY17 2QFY17 3QFY17 4QFY17 1QFY18 2QFY18 3QFY18 4QFY18 1QFY19 2QFY19 3QFY19 4QFY19 1QFY20 Customer Assets 47,950 48,710 55,320 59,590 69,050 65,000 72,300 77,620 79,000 77,050 79,550 79,150 92,420 90,300 YoY (%) 46.7 42.0 37.5 25.2 44.0 33.4 30.7 30.3 14.4 18.5 10.0 2.0 17.0 17.2 NII 710 670 720 740 770 730 760 770 780 720 610 680 920 870 YoY (%) 42.0 39.6 14.3 5.7 8.5 9.0 5.6 4.1 1.3 (1.4) (19.7) (11.7) 17.9 20.8 Calc. NIM (%) 5.9 5.5 5.5 5.2 4.8 4.4 4.4 4.1 4.0 3.7 3.1 3.4 4.3 3.8 Total Income 850 720 930 850 1,000 800 1,000 930 1,530 880 850 800 1,350 1,140 YoY (%) 19.7 28.6 36.8 16.4 17.6 11.1 7.5 9.4 53.0 10.0 (15.0) (14.0) (11.8) 29.5 PBT 750 610 760 710 830 690 840 770 1380 740 700 610 1110 940 YoY (%) 31.6 32.6 38.2 18.3 10.7 13.1 10.5 8.5 66.3 7.2 (16.7) (20.8) (19.6) 27.0 PAT 500 400 530 480 560 450 550 500 950 480 450 400 730 630 YoY (%) 25.0 33.3 47.2 23.1 12.0 12.5 3.8 4.2 69.6 6.7 (18.2) (20.0) (23.2) 31.3 NNPA (Rs mn) 24.0 24.4 66.4 53.6 48.3 58.5 43.4 38.8 7.9 - 31.8 372.0 268.0 577.9 NNPA (%) 0.05 0.05 0.12 0.09 0.07 0.09 0.06 0.05 0.01 - 0.04 0.47 0.29 0.64 Source : Bank, HDFC sec Inst Research Change In Estimates

Rs mn FY20E FY21E

Old New Change Old New Change NII 134,298 134,213 -0.1% 159,508 159,496 0.0% PPOP 103,773 103,763 0.0% 123,790 123,848 0.0% PAT 59,346 59,616 0.5% 71,689 71,936 0.3% ABV (Rs) 237.5 237.8 0.1% 272.4 273.0 0.2%

Source: HDFC sec Inst Research

Page | 10


Peer Set Comparison

BANK Mcap (Rs bn)

CMP (Rs) Rating TP

(Rs) ABV (Rs) P/E (x) P/ABV (x) ROAE (%) ROAA (%)

FY19E FY20E FY21E FY19E FY20E FY21E FY19E FY20E FY21E FY19E FY20E FY21E FY19E FY20E FY21E KMB # 2,777 1,454 NEU 1,531 201 238 273 44.9 37.2 30.1 5.70 4.88 4.15 13.0 13.7 14.3 1.70 1.77 1.80 ICICIBC # 2,654 412 BUY 454 138 153 172 59.9 18.1 12.7 2.27 2.02 1.76 3.3 9.2 12.0 0.36 1.07 1.33 AXSB# 1,904 728 BUY 896 215 261 309 38.4 20.5 14.3 3.24 2.67 2.26 7.2 12.4 15.4 0.63 1.05 1.32 IIB 981 1,417 BUY 1,964 400 515 550 25.9 19.9 15.2 3.54 2.75 2.58 13.3 16.1 17.2 1.32 1.58 1.68 RBL 238 478 NEU 512 168 216 247 23.5 25.8 18.0 2.84 2.21 1.93 12.2 9.5 10.6 1.22 1.00 1.14 FB 190 96 BUY 117 59 64 75 15.3 11.9 9.0 1.63 1.49 1.27 9.8 11.5 13.7 0.84 0.93 1.06 CUB 145 198 BUY 240 58 68 80 21.3 18.4 15.6 3.42 2.89 2.47 15.2 15.1 15.4 1.60 1.61 1.61 DCBB 60 192 NEU 234 88 98 112 18.3 14.8 11.5 2.19 1.96 1.71 11.0 12.2 14.0 0.99 1.03 1.12 KVB 51 64 NEU 84 50 52 60 24.2 14.9 8.7 1.28 1.22 1.06 3.3 5.3 8.9 0.31 0.47 0.73 SBIN # 3,131 351 BUY 383 146 188 222 270.4 9.4 6.4 1.79 1.38 1.16 0.4 10.6 14.0 0.02 0.64 0.85 AUBANK 199 657 BUY 680 101 128 151 50.3 35.5 25.4 6.50 5.13 4.35 14.1 15.3 17.3 1.48 1.49 1.62

Source: Company, HDFC sec Inst Research, # Adjusted for embedded value of subs

Page | 11


Income Statement (Rs mn) FY18 FY19 FY20E FY21E FY22E

Interest Earned 197,485 239,432 288,030 345,147 409,951

Interest Expended 102,168 126,842 153,817 185,651 220,960

Net Interest Income 95,317 112,590 134,213 159,496 188,991

Other Income 40,522 46,040 52,133 59,615 68,694

Fee Income (CEB) 27,645 33,908 38,407 44,841 52,817 Treasury Income 2,123 709 1,750 2,000 2,250 Total Income 135,839 158,630 186,346 219,111 257,685

Total Operating Exp 64,257 75,148 82,584 95,262 109,787

Employee Expense 29,502 31,836 35,577 40,636 46,253 PPOP 71,582 83,482 103,763 123,848 147,897

Provisions & Contingencies 9,400 9,624 13,023 14,357 16,034

Prov. For NPAs (Incl. Std Prov.) 7,375 9,589 12,273 13,607 15,784 PBT 62,182 73,858 90,740 109,491 131,863

Provision For Tax 21,339 25,205 31,124 37,556 45,229

PAT 40,843 48,653 59,616 71,936 86,634 Source: Bank, HDFC sec Inst Research

Balance Sheet (Rs mn) FY18 FY19 FY20E FY21E FY22E

SOURCES OF FUNDS Share Capital 9,528 9,544 9,544 9,544 9,544

Reserves 365,288 414,440 469,571 537,021 618,609

Shareholders' Funds 374,817 423,984 479,114 546,565 628,152

Savings 655,292 796,847 996,059 1,245,074 1,556,342 Current 322,458 389,010 427,911 470,702 508,358 Term Deposit 948,683 1,072,947 1,276,739 1,533,545 1,816,933 Total Deposits 1,926,433 2,258,804 2,700,709 3,249,320 3,881,633

Borrowings 251,563 327,504 360,252 403,480 439,791

Other Liabilities 96,521 111,430 122,573 134,830 148,313

Total Liabilities 2,649,334 3,121,721 3,662,648 4,334,194 5,097,889

APPLICATION OF FUNDS Cash & Bank Balance 196,201 246,755 275,757 294,323 321,365

Investments 645,623 711,891 793,925 925,905 1,060,790

G-Secs 517,577 580,630 661,674 779,837 902,480 Advances 1,697,179 2,056,948 2,477,900 2,989,374 3,580,806

Fixed Assets 15,272 16,516 18,167 19,984 21,982

Other Assets 95,059 89,611 96,898 104,608 112,946

Total Assets 2,649,334 3,121,721 3,662,648 4,334,194 5,097,889 Source: Bank, HDFC sec Inst Research

Page | 12


Key Ratios

FY18 FY19 FY20E FY21E FY22E VALUATION RATIOS EPS (Rs) 21.4 25.5 31.2 37.7 45.4 Earnings Growth (%) 19.7 19.1 22.5 20.7 20.4 BVPS (Rs) 183.7 208.9 245.6 280.9 323.6 Core Adj. BVPS (Rs) 175.0 200.8 237.8 273.0 312.8 DPS (Rs) 0.8 0.8 0.8 0.8 0.9 ROAA (%) 1.72 1.70 1.77 1.80 1.84 ROAE (%) 12.5 12.2 13.2 14.0 14.7 P/E (x) 55.3 44.9 37.2 30.1 24.4 P/ABV (x) 6.78 5.70 4.89 4.15 3.53 P/PPOP (x) 19.4 16.6 13.4 11.2 9.4 Dividend Yield (%) 0.1 0.1 0.1 0.1 0.1 PROFITABILITY Yield On Advances (%) 9.63 9.79 10.03 10.10 10.07 Yield On Investment (%) 7.17 7.18 7.10 7.10 7.05 Cost Of Funds (%) 5.16 5.32 5.45 5.53 5.54 Cost Of Deposits (%) 5.11 5.26 5.23 5.28 5.34 Core Spread (%) 4.48 4.46 4.58 4.57 4.53 NIM (%) 4.32 4.20 4.24 4.26 4.26 OPERATING EFFICIENCY Cost/Avg. Asset Ratio (%) 2.7 2.6 2.4 2.4 2.3 Cost-Income Ratio (Ex. Treasury) 48.1 47.6 44.7 43.9 43.0 BALANCE SHEET STRUCTURE Loan Growth (%) 24.7 21.2 20.5 20.6 19.8 Deposit Growth (%) 22.4 17.3 19.6 20.3 19.5 C/D Ratio (%) 88.1 91.1 91.8 92.0 92.3 Equity/Assets (%) 14.1 13.6 13.1 12.6 12.3 Equity/Advances (%) 22.1 20.6 19.3 18.3 17.5 CASA (%) 50.8 52.5 52.7 52.8 52.7 Capital Adequacy Ratio (CAR, %) 18.2 17.5 17.5 16.8 16.4 W/w Tier I CAR (%) 17.6 16.9 17.1 16.5 16.2

FY18 FY19 FY20E FY21E FY22E ASSET QUALITY Gross NPLs (Rs bn) 38.3 44.7 48.8 53.9 65.3 Net NPLs (Rs bn) 16.7 15.4 14.8 15.0 20.7 Gross NPLs (%) 2.22 2.14 1.97 1.80 1.82 Net NPLs (%) 0.98 0.75 0.60 0.50 0.58 Slippages (%) 1.2% 1.1% 1.2% 1.1% 1.2% Coverage Ratio (%) 56.5 65.4 69.7 72.1 68.3 Provision/Avg. Loans (%) 0.5 0.5 0.5 0.5 0.5 ROAA TREE Net Interest Income 3.98% 3.90% 3.96% 3.99% 4.01% Non Interest Income 1.69% 1.60% 1.54% 1.49% 1.46% Treasury Income 0.09% 0.02% 0.05% 0.05% 0.05% Operating Cost 2.68% 2.60% 2.43% 2.38% 2.33% Provisions 0.39% 0.33% 0.38% 0.36% 0.34% Provisions For NPAs 0.26% 0.29% 0.33% 0.31% 0.30% Tax 0.89% 0.87% 0.92% 0.94% 0.96% ROAA 1.70% 1.69% 1.77% 1.80% 1.84% Leverage (x) 7.37 7.22 7.51 7.80 8.03 ROAE 12.55% 12.18% 13.20% 14.03% 14.75%

Source: Bank, HDFC sec Inst Research

Page | 13


RECOMMENDATION HISTORY

Rating Definitions BUY : Where the stock is expected to deliver more than 10% returns over the next 12 month period NEUTRAL : Where the stock is expected to deliver (-)10% to 10% returns over the next 12 month period SELL : Where the stock is expected to deliver less than (-)10% returns over the next 12 month period

Date CMP Reco Target 6-Jul-18 1,365 BUY 1,371

20-Jul-18 1,347 BUY 1,378 9-Oct-18 1,104 BUY 1,380

25-Oct-18 1,177 BUY 1,377 8-Jan-19 1,248 BUY 1,415

22-Jan-19 1,268 BUY 1,400 9-Apr-19 1,342 BUY 1,458 2-May-19 1,387 BUY 1,481 9-Jul-19 1,475 BUY 1,481

23-Jul-19 1,454 NEU 1,531

800

900

1,000

1,100

1,200

1,300

1,400

1,500

1,600

Jul-1

8

Aug-

18

Sep-

18

Oct

-18

Nov

-18

Dec-

18

Jan-

19

Feb-

19

Mar

-19

Apr-

19

May

-19

Jun-

19

Jul-1

9

Kotak Mahindra Bank TP

HDFC securities Institutional Equities Unit No. 1602, 16th Floor, Tower A, Peninsula Business Park, Senapati Bapat Marg, Lower Parel, Mumbai - 400 013 Board : +91-22-6171 7330 www.hdfcsec.com

Page | 14


Disclosure: We, Darpin Shah, MBA & Aakash Dattani, ACA, authors and the names subscribed to this report, hereby certify that all of the views expressed in this research report accurately reflect our views about the subject issuer(s) or securities. HSL has no material adverse disciplinary history as on the date of publication of this report. We also certify that no part of our compensation was, is, or will be directly or indirectly related to the specific recommendation(s) or view(s) in this report. Research Analyst or his/her relative or HDFC Securities Ltd. does not have any financial interest in the subject company. Also Research Analyst or his relative or HDFC Securities Ltd. or its Associate may have beneficial ownership of 1% or more in the subject company at the end of the month immediately preceding the date of publication of the Research Report. Further Research Analyst or his relative or HDFC Securities Ltd. or its associate does not have any material conflict of interest. Any holding in stock –No HDFC Securities Limited (HSL) is a SEBI Registered Research Analyst having registration no. INH000002475. Disclaimer: This report has been prepared by HDFC Securities Ltd and is solely for information of the recipient only. The report must not be used as a singular basis of any investment decision. The views herein are of a general nature and do not consider the risk appetite or the particular circumstances of an individual investor; readers are requested to take professional advice before investing. Nothing in this document should be construed as investment advice. Each recipient of this document should make such investigations as they deem necessary to arrive at an independent evaluation of an investment in securities of the companies referred to in this document (including merits and risks) and should consult their own advisors to determine merits and risks of such investment. The information and opinions contained herein have been compiled or arrived at, based upon information obtained in good faith from sources believed to be reliable. Such information has not been independently verified and no guaranty, representation of warranty, express or implied, is made as to its accuracy, completeness or correctness. All such information and opinions are subject to change without notice. Descriptions of any company or companies or their securities mentioned herein are not intended to be complete. HSL is not obliged to update this report for such changes. HSL has the right to make changes and modifications at any time. This report is not directed to, or intended for display, downloading, printing, reproducing or for distribution to or use by, any person or entity who is a citizen or resident or located in any locality, state, country or other jurisdiction where such distribution, publication, reproduction, availability or use would be contrary to law or regulation or what would subject HSL or its affiliates to any registration or licensing requirement within such jurisdiction. If this report is inadvertently sent or has reached any person in such country, especially, United States of America, the same should be ignored and brought to the attention of the sender. This document may not be reproduced, distributed or published in whole or in part, directly or indirectly, for any purposes or in any manner. Foreign currencies denominated securities, wherever mentioned, are subject to exchange rate fluctuations, which could have an adverse effect on their value or price, or the income derived from them. In addition, investors in securities such as ADRs, the values of which are influenced by foreign currencies effectively assume currency risk. It should not be considered to be taken as an offer to sell or a solicitation to buy any security. This document is not, and should not, be construed as an offer or solicitation of an offer, to buy or sell any securities or other financial instruments. This report should not be construed as an invitation or solicitation to do business with HSL. HSL may from time to time solicit from, or perform broking, or other services for, any company mentioned in this mail and/or its attachments. HSL and its affiliated company(ies), their directors and employees may; (a) from time to time, have a long or short position in, and buy or sell the securities of the company(ies) mentioned herein or (b) be engaged in any other transaction involving such securities and earn brokerage or other compensation or act as a market maker in the financial instruments of the company(ies) discussed herein or act as an advisor or lender/borrower to such company(ies) or may have any other potential conflict of interests with respect to any recommendation and other related information and opinions. HSL, its directors, analysts or employees do not take any responsibility, financial or otherwise, of the losses or the damages sustained due to the investments made or any action taken on basis of this report, including but not restricted to, fluctuation in the prices of shares and bonds, changes in the currency rates, diminution in the NAVs, reduction in the dividend or income, etc. HSL and other group companies, its directors, associates, employees may have various positions in any of the stocks, securities and financial instruments dealt in the report, or may make sell or purchase or other deals in these securities from time to time or may deal in other securities of the companies / organizations described in this report. HSL or its associates might have managed or co-managed public offering of securities for the subject company or might have been mandated by the subject company for any other assignment in the past twelve months. HSL or its associates might have received any compensation from the companies mentioned in the report during the period preceding twelve months from t date of this report for services in respect of managing or co-managing public offerings, corporate finance, investment banking or merchant banking, brokerage services or other advisory service in a merger or specific transaction in the normal course of business. HSL or its analysts did not receive any compensation or other benefits from the companies mentioned in the report or third party in connection with preparation of the research report. Accordingly, neither HSL nor Research Analysts have any material conflict of interest at the time of publication of this report. Compensation of our Research Analysts is not based on any specific merchant banking, investment banking or brokerage service transactions. HSL may have issued other reports that are inconsistent with and reach different conclusion from the information presented in this report. Research entity has not been engaged in market making activity for the subject company. Research analyst has not served as an officer, director or employee of the subject company. We have not received any compensation/benefits from the subject company or third party in connection with the Research Report. HDFC securities Limited, I Think Techno Campus, Building - B, "Alpha", Office Floor 8, Near Kanjurmarg Station, Opp. Crompton Greaves, Kanjurmarg (East), Mumbai 400 042 Phone: (022) 3075 3400 Fax: (022) 2496 5066 Compliance Officer: Binkle R. Oza Email: [email protected] Phone: (022) 3045 3600 HDFC Securities Limited, SEBI Reg. No.: NSE, BSE, MSEI, MCX: INZ000186937; AMFI Reg. No. ARN: 13549; PFRDA Reg. No. POP: 11092018; IRDA Corporate Agent License No.: HDF 2806925/HDF C000222657; SEBI Research Analyst Reg. No.: INH000002475; SEBI Investment Adviser Reg. No.: INA000011538; CIN - U67120MH2000PLC152193 Mutual Funds Investments are subject to market risk. Please read the offer and scheme related documents carefully before investing.

Page | 15

mailto:[email protected]

Documents

NEUTRAL Mahindra Bank - 1QFY20 - HDFC sec... · slowest in 2 years (yet ahead of system), dragged by moderate corp & biz loan growth (+7%). Slower growth has been a recurring theme