At a Glance
Kotak Mahindra Bank used to be the suave overachiever of Indian banking. But post-Uday Kotak’s partial exit, it’s been more Mr. Spreadsheet than Mr. Swag. Despite growing profits to ₹22,126 Cr in FY25 and maintaining elite NPAs, the stock has underperformed peers like ICICI and Axis. Is the magic fading?
🧠 TL;DR
- 🏦 Full-spectrum financial services: retail, broking, AMC, insurance, investment banking
- 💸 FY25 PAT: ₹22,126 Cr | EPS: ₹111 | ROE: 13.4%
- 🐌 TTM PAT growth: Just 6% — while ICICI & HDFC sprinted
- 🧾 Contingent Liabilities? ₹7.77 lakh crore 😮
- 📉 Stock CAGR: 10% (5Y), 9% (3Y) – laggard alert
- 🎯 Fair Value Range: ₹1,550 – ₹1,800
🧾 1. Financials Recap: Consistent… and Boring?
| Metric | FY21 | FY22 | FY23 | FY24 | FY25 |
|---|---|---|---|---|---|
| Revenue (₹ Cr) | 32,820 | 33,741 | 42,151 | 56,237 | 65,669 |
| Net Profit (₹ Cr) | 9,990 | 12,089 | 14,925 | 18,213 | 22,126 |
| EPS (₹) | 50.4 | 60.9 | 75.1 | 91.6 | 111.3 |
| ROE (%) | 13% | 13% | 14% | 15% | 13% |
| Gross NPA (%) | 3.3% → 1.45% (Excellent trend) |
✅ Good:
- Healthy loan book, strong underwriting
- Net NPA: just 0.36%
- CASA Ratio among best in class
😒 Meh:
- ROE below ICICI’s 18%
- Over-reliant on “Other Income” (₹41,211 Cr in FY25!)
- Growth is slow despite balance sheet strength
📊 2. CAGR Game (5-Year)
| Metric | CAGR |
|---|---|
| Revenue | 14% |
| PAT | 18% |
| EPS | 17% |
| Stock Price | Just 10% |
Even Uday Kotak’s charisma couldn’t juice those stock returns. Investors are asking: Why buy Kotak when ICICI is compounding faster?
🔍 3. Segment Insights
Kotak isn’t just a bank. It’s an empire.
| Segment | Snapshot |
|---|---|
| 🏦 Retail Banking | Core engine, slow-paced deposit growth |
| 🏢 Corporate & Treasury | Stable, but less aggressive than Axis/ICICI |
| 📈 Broking (Kotak Sec) | 11.8% market share |
| 💰 Asset Management | ₹3.5 lakh Cr AUM, 6.5% market share |
| 🛡️ Insurance (Life + General) | Modest size but growing slowly |
The upside? Diversification.
The downside? No breakout business driving alpha.
💼 4. Management & Ownership
- 🔄 Uday Kotak stepped down as MD in 2023; continues as non-exec board member
- 📉 Promoter holding capped at 25.88%
- 🏛️ Board now under RBI hawk-eye after legacy criticism of governance
Shareholding Pattern (Mar ’25)
| Category | % Holding |
|---|---|
| Promoters | 25.88% |
| FIIs | 32.65% |
| DIIs | 29.13% |
| Public | 12.34% |
Retail isn’t exactly bullish here. Smart money is holding… but cautiously.
💰 5. Contingent Bomb: ₹7.77 Lakh Crore?! 😱
Yep, Screener says ₹7,77,539 Cr in contingent liabilities. Before you panic:
- Mostly due to derivative and trading book exposures (treasury ops)
- Not unusual for a large bank
- But still… maybe don’t put “safe as FD” in the brochure just yet
📉 6. Valuation: Discount Deserved?
| Metric | Value |
|---|---|
| CMP | ₹2,224 |
| EPS (FY25) | ₹111 |
| P/E | 20x |
| Book Value | ₹792 |
| P/B | 2.81x |
| ROE | 13.4% |
Compare with Peers:
| Bank | P/E | ROE | Price CAGR (5Y) |
|---|---|---|---|
| HDFC Bank | 21x | 17% | 13% |
| ICICI Bank | 19x | 18% | 18% |
| Axis Bank | 13.5x | 14% | 20% |
| Kotak | 23x | 13% | 10% 🙃 |
So why the premium? Old reputation. Clean books. But the story hasn’t changed in 3 years.
🎯 7. Fair Value Estimate
Let’s do some math:
- FY26E EPS = ₹125
- Fair P/E = 12–15 (ICICI trades at 19x because it’s growing faster)
- 🎯 FV = ₹1,500 – ₹1,875
So:
- EduInvesting FV Range = ₹1,550 – ₹1,800
At ₹2,224, you’re buying a promise. But Kotak’s become that overachiever from school who now just files good reports and leaves early.
🧠 Final Verdict: Still Elite, But No Longer Exciting
Kotak Bank still has:
- 💪 Immaculate NPAs
- 📦 Diversified biz model
- 💼 No skeletons (yet)
But also:
- 🐢 Slower growth
- 🧾 Hidden risks (contingent liabilities)
- 😴 Flat stock performance
If you already hold it, enjoy the peace. If you’re looking for alpha, this isn’t 2016 anymore.
Tags: Kotak Mahindra Bank, Uday Kotak, private banks, Indian banking, ICICI vs Kotak, PSU vs private bank, banking stocks, ROE comparison, Kotak share price, Kotak FY25
✍️ Written by Prashant | 📅 June 24, 2025
