Staying invested in shares for a long period of time has made fortunes for investors, particularly when they find a company with good fundamentals and invest when its shares are available at low prices.
The shares of Kotak Mahindra Bank rose from ₹ 1.65 apiece to ₹ 1,930.80 in the last twenty years. Its shares gave multibagger returns of a whopping 116918.18%. Therefore, if an investor would have invested ₹ 1 lakh in the bank’s shares twenty years ago, the value of their holdings would have been ₹ 11.70 crores today!
The bank has a net interest margin of 4.05 for the financial year 2021-22 and a net profit margin of 35.36. Its CASA ratio has increased over a period of five years from 50.84% to 60.62% and is one of the highest in the industry. A high CASA ratio indicates that the bank gets funds at a lower cost, thereby increasing its margins.
Emkay Global has a ‘buy’ rating on the shares of Kotak Mahindra Bank with a target price of ₹ 2230.00. This translates to an upside of 15.50% as compared to its current market price.
Kotak Mahindra Bank is a leading financial services group providing a wide range of banking and financial services including Retail Banking, Treasury and Corporate Banking, Investment Banking, Stock Broking, Vehicle Finance, Advisory Services, Asset Management, Life Insurance and General Insurance.
It is a large-cap bank with a market capitalization of 3.84 lakh crores. It has an ideal debt-to-equity ratio of 0.45. However, it has a low return on equity of 13.28%. Its shares are trading at a price-to-equity ratio of 28.11, which is significantly higher than the industry P/E of 9.88. This could mean that the stock is overvalued, or that investors see high growth potential in it.
The bank’s promoters hold a 25.96% stake in it, foreign institutional investors hold 39.26%, retail investors hold 16.34%, mutual funds hold 9.93% and other domestic institutions hold an 8.51% stake in it.
Written by Simran Bafna
Disclaimer
The content in this news article is not investment advice. Investing in equities poses a risk of financial losses. Investors must therefore exercise due caution while investing or trading in stocks. Dailyraven Technologies or the author are not liable for any losses caused as a result of the decision based on this article. Please consult your investment advisor before investing.
