Many investors prefer to find the stocks of companies that they believe will do well, based on their fundamentals and stay invested in them for a very long period of time. In fact, this is one of the most common beliefs among some of the most famous investors around the world. Staying invested in stocks for a long period of time helps investors reap the benefits of a multifold increase in their share price.
One such stock is Kotak Mahindra Bank, whose share price increased from ₹ 1.71 to ₹ 1772.50 apiece in a span of twenty years, logging 103555% gains. Therefore, if an investor had invested ₹ 1 lakh in the company’s stock twenty years ago, the value of their holdings would have been ₹ 10.36 crores today!
Kotak Mahindra Bank is a diversified 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.
The bank reported revenue of ₹ 68,142 crores for the financial year 2022-23, up 15.40%, compared to ₹ 59,051 crores reported in the financial year 2021-22. Its net profit increased by 23.46% to ₹ 14,925 crores in FY 2022-23, compared to ₹12,089.00 crores in FY 2021-22.
With a market capitalization of ₹ 3,49,706 crores, Kotak Mahindra Bank is a large-cap banking company. It has a low return on equity of 1.69 percent. Its shares were trading at a price-to-earnings ratio (P/E) of 21.43, which is higher than the industry P/E of 13.93 indicating that the stock might be overvalued as compared to its peers.
Foreign institutions hold a 39.88% stake in the company followed by promoters with 25.94%, retail investors with 16.24%, mutual funds with 9.45% and other domestic institutions with 8.49% stake.
Written by Simran Bafna
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