22 January 2019
Market snapshot
Equities - India
Sensex
Nifty-50
Nifty-M 100
Equities-Global
S&P 500
Nasdaq
FTSE 100
DAX
Hang Seng
Nikkei 225
Commodities
Brent (US$/Bbl)
Gold ($/OZ)
Cu (US$/MT)
Almn (US$/MT)
Currency
USD/INR
USD/EUR
USD/JPY
YIELD (%)
10 Yrs G-Sec
10 Yrs AAA Corp
Flows (USD b)
FIIs
DIIs
Volumes (INRb)
Cash
F&O
Note: *Average
Close
36,579
10,962
17,378
Close
2,671
7,157
6,971
11,136
10,713
20,719
Close
62
1,276
5,952
1,848
Close
71.3
1.1
109.7
Close
7.3
8.6
21-Jan
-0.04
0.07
21-Jan
315
5,471
Chg .%
0.5
0.5
-0.8
Chg .%
0.0
0.0
0.0
-0.6
0.7
0.3
Chg .%
0.5
-0.5
-1.3
-0.8
Chg .%
0.1
0.0
-0.1
1MChg
0.04
0.00
MTD
-0.3
0.2
MTD*
289
8,614
CYTD.%
1.4
0.9
-2.3
CYTD.%
7.4
8.7
3.5
5.5
7.2
3.5
CYTD.%
20.2
-0.4
-0.6
-0.5
CYTD.%
1.9
-0.7
-0.5
CYTDchg
-0.1
0.0
CY18
-4.6
15.9
CYTD*
289
8,614
Today’s top research idea
Kotak Mahindra Bank: Loan growth accelerates further,
margin cycle set to reverse
KMB has been reporting strong traction in loan growth, even as it is
consciously not growing the business banking segment. Healthy
capitalization (tier1 of 17.6%) places the bank in a sweet spot to capitalize
on growth opportunities and consistently gain market share.
We expect loan CAGR of 23% over FY19-21 on the back of higher refinancing
opportunities, increased pricing power, healthy customer acquisition run-
rate and cross-sell to existing customers. Further, the bank has maintained
stable asset quality in a challenging environment and is on track to build a
formidable liability franchise. The capital market, securities and asset
management businesses can provide further upside to earnings as the
business cycle improves.
We estimate consol. earnings CAGR of 20% over FY18-21. Maintain
Neutral
with a revised TP of INR1,350 (3.8x Sep’20E ABV for the lending business).
Research covered
Cos/Sector
Key Highlights
Kotak Mahindra Bank Loan growth accelerates further, margin cycle set to reverse
Hindustan Zinc
In-line: On track to achieve 1.2mt mine prod. Capacity
Performance encouraging; Outcome of IL&FS saga key
L&T Fin. Holdings
monitorable
Coromandel Intl
In-line revenue; marginal beat on EBITDA/PAT
MRPL
Expect better refining margins
Zensar Technologies Revenue traction at the expense of profitability
South Indian Bank
Asset quality concerns to ease; valuations reasonable
Metals Weekly
India steel product prices remain weak
ALPM | APNT | HAVELLS | HDFCLIFE | IPRU | OBEROI | SCRM |
Results Expectation
TVSL
Chart of the Day: Kotak Mahindra Bank – Loan growth accelerates further, margin cycle set
to reverse
Auto loans grew 1.1% YoY and -2.6% QoQ
K-Sec market share improved 90bp QoQ to 2.9%
Source: MOSL, Company
Source: MOSL, Company
Research Team (Gautam.Duggad@MotilalOswal.com)
Motilal Oswal research is available on www.motilaloswal.com/Institutional-Equities, Bloomberg, Thomson Reuters, Factset and S&P Capital.
Investors are advised to refer through important disclosures made at the last page of the Research Report.