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SBICAP Securities has a 'sell' call on Kotak Mahindra Bank. Here's why

Updated : July 23, 2019 11:06 AM IST

SBICAP Securities has a 'sell' call on Kotak Mahindra Bank, said Krishnan ASV, vice-president of the company, adding "we are unable to see any visibility around how the return on equity (RoE) will be".

"Capital allocation and the entire headwind around what happens with the promoters’ stake are the two big reasons why SBICAP Securities has a sell on this stock," he said in an interview with CNBC-TV18.

“Both Kotak and HDFC Bank are likely to be very conservative. That is not the reason why we would have a 'sell' on one and a 'buy' on one. My point is, after being conservative, if you can generate 17 percent RoE versus a 13 percent RoE, then it makes a big deal,” he added.

Krishnan is looking at about Rs 2,600 per share as the price target for HDFC Bank.

“We do have a 'buy' on RBL Bank. We have 40 percent upside target from Rs 480-500 level,” he further added.
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