Derivatives and Quantitative Strategist

Gaudenz Schneider

Equity Bottom-Up

<ul>
<li>The <a href="https://www.smartkarma.com/entities/bajaj-finance-ltd" target="_blank" data-smartkarma-citation="entities:8950:1" rel="noopener">Bajaj Finance Ltd (BAF IN)</a> vs. <a href="https://www.smartkarma.com/entities/kotak-mahindra-bank-ltd" target="_blank" data-smartkarma-citation="entities:126:1" rel="noopener">Kotak Mahindra Bank (KMB IN)</a> Price-Ratio has deviated more than two standard deviations from its one-year average, presenting a potential relative value opportunity.</li>
<li>While one of the two companies displays higher revenue growth, the valuation might begin to become stretched. Fundamental key figures are provided to complement the statistical analysis.</li>
<li>Trade setup, statistical properties, factor exposure, risk management strategies, and key events are discussed.</li>
</ul>


The Bajaj Finance Ltd (BAF IN) vs. Kotak Mahindra Bank (KMB IN) Price-Ratio has deviated more than two standard deviations from its one-year average, presenting a potential relative value opportunity.
While one of the two companies displays higher revenue growth, the valuation might begin to become stretched. Fundamental key figures are provided to complement the statistical analysis.
Trade setup, statistical properties, factor exposure, risk management strategies, and key events are discussed.


Bajaj Finance (BAF IN) Vs. Kotak Mahindra Bank (KMB IN): A Relative Value Play

External broker reports(aggregated public sources), Axis Direct

Axis Direct

External broker reports(aggregated public sources)

Axis Direct is the flagship brand under Axis Securities Limited, a subsidiary of Axis Bank in India. 

Content available is external broker reports authored by a third party outside the Smartkarma network and has been aggregated by an online aggregator through publicly available sources and is displayed by Smartkarma in this format for user's convenience and general informational purposes only. Content does not constitute investment or financial advice and Smartkarma makes no representation or warranty regarding its accuracy or contents. Original third party author retains all copyright and other proprietary rights in the content. Access or use of third party links not controlled by Smartkarma are at the user's own risk.

<ul><li>Focus shifts to calibrated growth in unsecured segments with embargo lifted: With the embargo on the digital sourcing lifted, KMB will look to resume growth in the unsecured manner, though in a calibrated manner</li><li>. The management intends to gradually scale up the share of the unsecured portfolio to 15% from ~10.5% currently.</li><li>The bank has resumed issuance of new credit cards and plans to roll out new cards and initiatives to drive healthy growth in the portfolio. </li></ul>Content is external broker report sourced from online content aggregator through publicly available sources and is displayed below for general informational purposes only. Refer full disclaimer below.

Focus shifts to calibrated growth in unsecured segments with embargo lifted: With the embargo on the digital sourcing lifted, KMB will look to resume growth in the unsecured manner, though in a calibrated manner. The management intends to gradually scale up the share of the unsecured portfolio to 15% from ~10.5% currently.The bank has resumed issuance of new credit cards and plans to roll out new cards and initiatives to drive healthy growth in the portfolio. Content is external broker report sourced from online content aggregator through publicly available sources and is displayed below for general informational purposes only. Refer full disclaimer below.

Kotak Mahindra Bank Ltd - Steady Quarter; Looking to Accelerate Growth in Unsecured Segments

External broker reports(aggregated public sources), Motilal Oswal Financial Services Limited

Motilal Oswal

Motilal Oswal Financial Services Limited

Motilal Oswal Financial Services Limited is an Indian diversified financial services firm offering a range of financial products and services. 

Content available is external broker reports authored by a third party outside the Smartkarma network and has been aggregated by an online aggregator through publicly available sources and is displayed by Smartkarma in this format for user's convenience and general informational purposes only. Content does not constitute investment or financial advice and Smartkarma makes no representation or warranty regarding its accuracy or contents. Original third party author retains all copyright and other proprietary rights in the content. Access or use of third party links not controlled by Smartkarma are at the user's own risk.

<ul><li>Kotak Mahindra Bank (KMB) reported a standalone PAT of ~INR33b (in line; 10% YoY growth).</li><li>Consol. PAT stood at INR47b (10% YoY growth) in 3QFY25. NII grew 10% YoY to INR71.9b (in line).</li><li>NIM surprised with a 2bp QoQ improvement to 4.93% (vs. our est. of 4.83%), benefitting from a reduction in SA rate.</li></ul>Content is external broker report sourced from online content aggregator through publicly available sources and is displayed below for general informational purposes only. Refer full disclaimer below.

Kotak Mahindra Bank (KMB) reported a standalone PAT of ~INR33b (in line; 10% YoY growth).Consol. PAT stood at INR47b (10% YoY growth) in 3QFY25. NII grew 10% YoY to INR71.9b (in line).NIM surprised with a 2bp QoQ improvement to 4.93% (vs. our est. of 4.83%), benefitting from a reduction in SA rate.Content is external broker report sourced from online content aggregator through publicly available sources and is displayed below for general informational purposes only. Refer full disclaimer below.

Kotak Mahindra Bank - Steady Performance Amid Challenging Macro; RoA Outlook Healthy

External broker reports(aggregated public sources), Sharekhan

Sharekhan

Sharekhan is India's leading broking house providing services from easy online trading, research to wide array of financial products. 

Content available is external broker reports authored by a third party outside the Smartkarma network and has been aggregated by an online aggregator through publicly available sources and is displayed by Smartkarma in this format for user's convenience and general informational purposes only. Content does not constitute investment or financial advice and Smartkarma makes no representation or warranty regarding its accuracy or contents. Original third party author retains all copyright and other proprietary rights in the content. Access or use of third party links not controlled by Smartkarma are at the user's own risk.

<ul><li>Q3FY25 numbers were stable despite an RBI embargo and sectoral headwinds but timelines relating to lifting of RBI embargo remain unclear.</li><li>Core PPoP (excl. treasury gains &amp; other income) grew by 11% y-o-y/ 4% q-o-q.</li><li>Most key operating metrics did well - NIMs were stable, loan growth was better than expectation, deposit growth was also healthy and most importantly, asset quality trends were stable.</li></ul>Content is external broker report sourced from online content aggregator through publicly available sources and is displayed below for general informational purposes only. Refer full disclaimer below.

Q3FY25 numbers were stable despite an RBI embargo and sectoral headwinds but timelines relating to lifting of RBI embargo remain unclear.Core PPoP (excl. treasury gains &amp; other income) grew by 11% y-o-y/ 4% q-o-q.Most key operating metrics did well - NIMs were stable, loan growth was better than expectation, deposit growth was also healthy and most importantly, asset quality trends were stable.Content is external broker report sourced from online content aggregator through publicly available sources and is displayed below for general informational purposes only. Refer full disclaimer below.

Kotak Mahindra Bank - Stable Show Amid Headwinds, RBI Embargo

External broker reports(aggregated public sources), Prabhudas Lilladhar

Prabhudas Lilladhar

Prabhudas Lilladher is one of India's leading research based financial services organisation.

Content available is external broker reports authored by a third party outside the Smartkarma network and has been aggregated by an online aggregator through publicly available sources and is displayed by Smartkarma in this format for user's convenience and general informational purposes only. Content does not constitute investment or financial advice and Smartkarma makes no representation or warranty regarding its accuracy or contents. Original third party author retains all copyright and other proprietary rights in the content. Access or use of third party links not controlled by Smartkarma are at the user's own risk.

<ul><li>KMB saw a strong quarter with beat on all fronts as loan growth, NIM, opex and asset quality were better.</li><li>Hence core PPoP beat PLe by 3.0%; core PAT was inline at due to higher provisions driven by increase in PCR by 175bps QoQ to 73% which was a positive.</li><li>Sequential loan growth was broad based but healthy at 3.6% QoQ considering (1) RBI embargo is still effective (2) acquisition of StanChart’s PL portfolio of Rs41bn is yet to be accounted (likely in Q4FY25) and (3) system credit accretion is weakening.</li></ul>Content is external broker report sourced from online content aggregator through publicly available sources and is displayed below for general informational purposes only. Refer full disclaimer below.

KMB saw a strong quarter with beat on all fronts as loan growth, NIM, opex and asset quality were better.Hence core PPoP beat PLe by 3.0%; core PAT was inline at due to higher provisions driven by increase in PCR by 175bps QoQ to 73% which was a positive.Sequential loan growth was broad based but healthy at 3.6% QoQ considering (1) RBI embargo is still effective (2) acquisition of StanChart’s PL portfolio of Rs41bn is yet to be accounted (likely in Q4FY25) and (3) system credit accretion is weakening.Content is external broker report sourced from online content aggregator through publicly available sources and is displayed below for general informational purposes only. Refer full disclaimer below.

Kotak Mahindra Bank (KMB IN) - Stronger Balance Sheet to Cushion Earnings

India

Kotak Mahindra Bank Limited is a full service commercial bank. The Bank offers a wide range of products and services such as personal, commercial, and corporate banking services, including deposit accounts, loans, and investments. Kotak Mahindra Bank serves customers in India.

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Kotak Mahindra Bank (KMB IN)

Bajaj Finance (BAF IN) Vs. Kotak Mahindra Bank (KMB IN): A Relative Value Play

The Price-ratio between Bajaj Finance Ltd and Kotak Mahindra Bank signals a potential relative value opportunity. Trade setup, risk management,...