Kotak Bank:Ahead Of Q4 Result Next Week: 730-750 May Be A Big Hurdle

Trading Idea: Kotak Bank

CMP: 707

Either sell below 730 or on rise around 750-765;

TGT: 690*-675-655*-634-604-585*-555-530 (1-3/6M)

TSL> 785

Note: Consecutive closing (3 days) above 785 for any reason, Kotak Bank may further rally up to 800-825*-840-870 & 905 in the near to long term (alternative bullish case scenario).

Kotak Bank may be running now much ahead of its fundamentals at PE of around 40 (consolidated) and 68 (standalone) against average Pvt. Banking PE of 20, despite a third generation bank and having good business in the capital market division.

For Kotak Bank (Consolidated Basis):

Q3FY16 TTM PE: 18.08 (Actual)

Projected FWD EPS: 21.65-25.85-31.05 (FY:16-18/Estimated)

Average PE: 25-30

As par BG metrics & current market parameters:

Present median value may be around: 560 (Q3FY16/TTM)

Projected fair value might be around: 610-665-730 (FY:16-18/FWD)

KOTAKBANK	EPS(TTM)	BV(Act)	P/E(AVG)	Low	High	Median	200-DEMA	10-DEMA
Q3FY16/TTM	18.08	121.08	25	548.61	562.58	555.59	665.86	700.21
FY16/FWD	21.65	139.3	25	600.33	615.62	607.98	665.86	700.21
FY17/FWD	25.85	160.25	25	655.98	672.69	664.34	665.86	700.21
FY18/FWD	31.05	185.15	25	718.94	737.25	728.09	665.86	700.21

Analytical Charts: