December 14, 2023
Top 10 Stock Kotak Mahindra Bank Sell Recommendation
How to read the ranks
For every stock, we judge its performance against its peers and rank it on a scale of 1 to 100. The higher the rank, the better the stock performs than its peers. And, we do this for six investment strategies:
Value - shows how good of a value the stock is. Green is "inexpensive"; red is "expensive".
Growth - shows a company's growth potential. Green is "high growth" expected; red is "tough times ahead".
Safety - relates to the amount of debt a company has. Green is low debt level; red is high debt level.
Combined Financial - this isn't an average of the first three ranks but rather a consolidated view across several financial indicators. Green = good; red = tread carefully.
(NEW) Sentiment - quantifies professional analyst ratings and holdings as well as market pulse. Green = positive sentiment; red = skepticism (Only available to Premium Subscribers).
(NEW) 360° View - the ultimate rating with all financial and non-financial indicators.
Snapshot: Kotak Mahindra Bank – Top 10 Stock in Bombay Stock Exchange Sensitive Index BSE Sensex
Kotak Mahindra Bank is listed as a top 10 stock on December 14, 2023 in the market index BSE Sensex because of its high performance in at least one of the Obermatt investment strategies. Only one consolidated Obermatt Rank is above-average. The company is growing above average, but all other facts speak against a stock purchase, especially the low market sentiment by professional investors. Based on the Obermatt 360° View of 13 (13% performer), Obermatt issues an overall sell recommendation for Kotak Mahindra Bank on December 14, 2023.
Snapshot: Obermatt Ranks
| Country | India |
| Industry | Diversified Banks |
| Index | BSE Sensex, Good Governace Growth Markets, Human Rights, CNX Nifty 50 |
| Size class | XX-Large |
When Obermatt identifies the Top 10 stocks in a market, it’s based on a certain investment strategy. The best performing stocks usually aren’t the ones that everyone is talking about (those are often "over-priced" and have low Value ranks).
For each investment strategy, we provide you with more detailed analysis and our recommendation. You see the ranks of the top 10 stocks ranked by that particular investment strategy (360° View, Sentiment, Value, Growth, Safety and Combined Financial Performance).
360° View: Obermatt 360° View Kotak Mahindra Bank Sell
| 360 METRICS | December 14, 2023 | |||||||
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| VALUE | ||||||||
| VALUE | 3 |
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| GROWTH | ||||||||
| GROWTH | 67 |
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| SAFETY | ||||||||
| SAFETY | 49 |
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| SENTIMENT | ||||||||
| SENTIMENT | 23 |
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| 360° VIEW | ||||||||
| 360° VIEW | 13 |
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ANALYSIS: With an Obermatt 360° View of 13 (better than 13% compared with alternatives), overall professional sentiment and financial characteristics for the stock Kotak Mahindra Bank are critical, mostly below average. The 360° View is based on consolidating four consolidated indicators, with three out of four indicators below average for Kotak Mahindra Bank. The consolidated Growth Rank has a good rank of 67, which means that the company experiences above-average growth momentum when looking at financial metrics such as revenue, profit, and invested capital growth, as well as stock returns. It ranks higher than 67% of competitors in the same industry. The other indicators are below average, namely the Value, Safety, and Sentiment Ranks.The Value Rank at 3 means that the share price of Kotak Mahindra Bank is on the high side compared with its peers regarding revenues, profits, and invested capital. The stock price is higher than for 97% of alternative stocks in the same industry. The consolidated Safety Rank has a riskier rank of 49, which means that the company has a riskier financing structure than 51% comparable companies when looking at the amount of its debt, its refinancing requirements, and its ability to service debt. The consolidated Sentiment Rank also has a low rank of 23, indicating professional investors are more pessimistic about the stock than for 77% of alternative investment opportunities. ...read more
RECOMMENDATION: With a consolidated 360° View of 13, Kotak Mahindra Bank is worse than 87% of all alternative stock investment opportunities based on the Obermatt Method. This means that Kotak Mahindra Bank shares are on the riskier side for investors. As only one of the consolidated Obermatt Ranks exhibits excellent performance, namely the above-average growth (Growth Rank of 67), it is a riskier stock investment proposition. Aside from the critical professional market sentiment (Sentiment Rank of 23), the company is rather risky when it comes to financing (Safety Rank of 49). The negative market view on Kotak Mahindra Bank may be due to the high stock price (low value). A growth company like this may get too expensive at one point in time. If too many investors are desperate to join the party, they may drive stock prices above reasonable levels. While it is typical for growth companies to have low value, because investors are willing to pay more for companies that are expected to have high growth, the crucial question is: how much more do you pay for the stock of Kotak Mahindra Bank compared with alternatives? You can use the following rule of thumb: The value rank shouldn’t be lower than one minus the growth rank. For example, if the growth rank is at 75, and the value rank is at 5, you should tread carefully. If the value rank is at 40, it still might be a good value (even though it is lower than 50). As market sentiment is critical, you should be careful with paying more than market-average for this stock and conduct further research into the company's future growth potential. ...read more
Sentiment Strategy: Professional Market Sentiment for Kotak Mahindra Bank negative
ANALYSIS: With an Obermatt Sentiment Rank of 23 (better than 23% compared with alternatives), overall professional sentiment and engagement for the stock Kotak Mahindra Bank is critical, mostly below average. The Sentiment Rank is based on consolidating four sentiment indicators, with half of the metrics below and half above average for Kotak Mahindra Bank. Analyst Opinions are at a rank of 24 (worse than 76% of alternative investments), which means that currently, stock research analysts tend to warn against investing in the stock of the company. Worse, Analyst Opinions Change has a rank of 49 which means that stock research experts are getting even more pessimistic. It doesn't end with the analysts. Market Pulse is also low with a rank of 46, which means that the current professional news and professional social networks are on the negative side when discussing this company (more negative news than for 54% of competitors). No wonder, the Professional Investors rank is only 33, which means that professional investors hold less stock in this company than in 67% of alternative investment opportunities. Pros tend to stay away from Kotak Mahindra Bank, which may be due to a small company size but just as likely because of its relatively low Sentiment Rank. ...read more
RECOMMENDATION: With a consolidated Sentiment Rank of 23 (less encouraging than 77% compared with investment alternatives), Kotak Mahindra Bank has a reputation among professional investors that is far below that of its competitors. Investors should be careful with this stock right now. Further research is required if an investment is desired, because the facts found in the professional community are all negative. ...read more
Value Strategy: Kotak Mahindra Bank Stock Price Value low
ANALYSIS: With an Obermatt Value Rank of 3 (worse than 97% compared with alternatives), Kotak Mahindra Bank shares are significantly more expensive than comparable stocks. The Value Rank is based on consolidating four value indicators, with all four indicators below average for Kotak Mahindra Bank. Price-to-Sales is 3 which means that the stock price compared with what market professionals expect for future profits is higher than 97% of comparable companies, indicating a low value concerning Kotak Mahindra Bank's sales levels. Price-to-Book Capital (also referred to as market-to-book ratio) also has a low Price-to-Book Rank of 9, which means that both reliable company size indicators, sales, and invested capital cannot explain the high stock price of Kotak Mahindra Bank. In addition, the two profit-related value indicators, Price-to-Profit (also referred to as price-earnings, P/E) with a low rank of 9 and Dividend Yield, which is lower than 88% of comparable companies, also make the stock more expensive compared with investment alternatives. ...read more
RECOMMENDATION: The overall picture with a consolidated Value Rank of 3, is a sell recommendation based on Kotak Mahindra Bank's stock price compared with the company's operational size and dividend yields. How can market participants pay such a high price for Kotak Mahindra Bank? One reason may be that the company is simply too popular. If enough people want a particular stock, its price can exceed reasonable levels. This is often the case for companies offering new and exciting products and everybody wants a piece of the action. Should you pay a lot for a hot stock such as Kotak Mahindra Bank? It's risky, and even if the stock price continues to grow because of popular demand, it may return to more typical lower levels later. And that return can be sudden and quick, making it impossible for retail investors to exit on time. Sometimes, high prices are deserved. This is the case when it is justified to believe that the company will dominate a market with high profit margins. It has happened in the past for many technology companies and indeed for commercially successful pharmaceutical discoveries. Sometimes they last, sometimes, they get eaten alive. Kotak Mahindra Bank may be such a type of stock. That would mean, retail investors should be careful, only considering investing a small part of their wealth in this exciting category and always being ready to lose more than half, if not all of the investment. ...read more
Growth Strategy: Kotak Mahindra Bank Growth Momentum good
| GROWTH METRICS | December 14, 2023 | |||||||
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| REVENUE GROWTH | ||||||||
| REVENUE GROWTH | 77 |
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| PROFIT GROWTH | ||||||||
| PROFIT GROWTH | 59 |
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| CAPITAL GROWTH | ||||||||
| CAPITAL GROWTH | 73 |
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| STOCK RETURNS | ||||||||
| STOCK RETURNS | 23 |
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| CONSOLIDATED RANK: GROWTH | ||||||||
| CONSOLIDATED RANK: GROWTH | 67 |
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ANALYSIS: With an Obermatt Growth Rank of 67 (better than 67% compared with alternatives), Kotak Mahindra Bank shows an above-average growth dynamic in its industry. Investors also speak of positive momentum. The Growth Rank is based on consolidating four value indicators, with all but one indicator above average for Kotak Mahindra Bank. Sales Growth has a value of 77 which means that currently professionals expect the company to grow more than 77% of its competitors. Profit Growth with a value of 59 and Capital Growth with a rank of 73 means that currently, professionals expect the company to grow both profits and invested capital more than of its competitors. But Stock Returns has only a rank of 23, which means that stock returns have recently been below 77% of alternative investments. ...read more
RECOMMENDATION: The overall picture with a consolidated Growth Rank of 67, is a buy recommendation for growth and momentum investors. Kotak Mahindra Bank has only one below-average growth indicator, the stock returns. This is probably the least reliable growth indicator, because it measures company and investor expectations at the same time. The three other growth indicators, which are all positive for Kotak Mahindra Bank, are more reliable measures of growth momentum. For this reason, the company seems to be on a good trajectory, unless you think the current period is not representative, because of unique events that will not be repeated in the future. ...read more
Safety Strategy: Kotak Mahindra Bank Debt Financing Safety below-average
| SAFETY METRICS | December 14, 2023 | |||||||
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| LEVERAGE | ||||||||
| LEVERAGE | 58 |
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| REFINANCING | ||||||||
| REFINANCING | 16 |
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| LIQUIDITY | ||||||||
| LIQUIDITY | 77 |
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| CONSOLIDATED RANK: SAFETY | ||||||||
| CONSOLIDATED RANK: SAFETY | 49 |
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ANALYSIS: With an Obermatt Safety Rank of 49 (better than 49% compared with alternatives), the company Kotak Mahindra Bank has financing practices on the riskier side, which means that their overall debt burden is above the industry average. This doesn't mean that the business of Kotak Mahindra Bank is also risky, it only means that the company is on the riskier side in respect to bankruptcy in case things turn sour, assuming that public reporting is correct. The Safety Rank is based on consolidating three financing indicators, with two out of three indicators above average for Kotak Mahindra Bank. Leverage is at a rank of 58, meaning the company has a below-average debt-to-equity ratio. It has less debt than 58% of its competitors. Liquidity is also good at a rank of 77, meaning the company generates more profit to service its debt than 77% of its competitors. This indicates that the company is on the safer side when it comes to debt service. But Refinancing is lower at a rank of 16, which means that the portion of the debt that is about to be refinanced is above-average. It has more debt in the refinancing stage than 84% of its competitors. ...read more
RECOMMENDATION: With a consolidated Safety Rank of 49 (worse than 51% compared with alternatives), Kotak Mahindra Bank has a financing structure that is riskier than that of its competitors. The refinancing issues could be a short-term problem, especially if the company has reputation issues. Banks and investors don't like to refinance debt if there are clouds on the horizon. For this reason, investors should look at the refinancing environment for Kotak Mahindra Bank. Does it look safe that debt that is coming due can be covered with new debt? If that is the case, then the financing situation of the company is on the safer side. If not, it may be better to wait until refinancing has been completed and the Refinancing rank is good again. ...read more
Combined financial peformance: Kotak Mahindra Bank Lowest Financial Performance
| COMBINED PERFORMANCE | December 14, 2023 | |||||||
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| VALUE | ||||||||
| VALUE | 3 |
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| GROWTH | ||||||||
| GROWTH | 67 |
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| SAFETY | ||||||||
| SAFETY | 77 |
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| COMBINED | ||||||||
| COMBINED | 17 |
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ANALYSIS: With an Obermatt Combined Rank of 17 (worse than 83% compared with investment alternatives), Kotak Mahindra Bank (Diversified Banks, India) shares have lower financial characteristics compared with similar stocks. Shares of Kotak Mahindra Bank are low in value (priced high) with a consolidated Value Rank of 3 (worse than 97% of alternatives), and are riskily financed (Safety Rank of 49, which means above-average debt burdens) but show above-average growth (Growth Rank of 67). ...read more
RECOMMENDATION: A Combined Rank of 17, is a sell recommendation based on Kotak Mahindra Bank's financial characteristics. As the company Kotak Mahindra Bank shows low value with an Obermatt Value Rank of 3 (97% of comparable investments are less expensive), investors should look at the other ranks. In this case, growth is expected to be above-average, better than 67% of comparable companies (Obermatt Growth Rank is 67). This is a typical case. Companies with above average growth tend to cost more than stocks with slower growth expectations. If this is a high-growth company, the low Obermatt Safety Rank of 49 is a good sign. The more debt a well-performing company has, the higher the returns to shareholders. However, if growth turns negative or interest rates increase, high debt may become a burden. If you believe the future is bright for Kotak Mahindra Bank, even a low-value company (in terms of its key financial indicators) can be a good investment. ...read more
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