The Single largest issue with Kotak in my opinion (and other respectable investors I have spoken with) is that they are OVERCAPITALISED
The High capital adequacy directly leads to lower ROE. Uday Kotak can Obviously not afford to keep low capital adequacy ratios like SBI (Guaranteed recapitalisation from GOI when needed). But it would be nice if he kept it at similar levels as HDFC-ICICI.
They own fantastic subsidiaries and we won’t see a banker like Uday, But a little focus on ROE would be needed.
It has fantastic subsidiaries, and the 3 years of sideways movement has made the valuations reasonable.
While it can continue as a great low double digit compounder, getting outsized returns seems tough.
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