Nomura Financial Advisory and Securities has maintained 'Neutral' rating on Kotak Mahindra Bank with target price of Rs 1,500 as against current market price Rs 1,423 in its report.

Commenting on the investment rationale Nomura said, ''4QFY15 PAT of Rs 9.1 billion (+38% y-y) was better than expected with a beat on both lending and capital market businesses. For the lending business, not only is revenue momentum picking up but also some of the fundamental metrics like CASA, fee intensity performance is better than expected and with buoyant capital markets we are finally seeing capital market profitability improve as well. We have nothing much to complain about; our only constraint remains rich valuations (3.4x FY17 book). Thus we maintain our Neutral rating.''

''We increase our consolidated PAT by 3/4% for FY16/17F driven by better fees in lending business and higher profitability of capital market businesses. Thus we increase our TP to Rs 1,500 implying 3.7x FY17F book for Kotak's lending business - similar to our HDFC Bank (HDFCB IN, Buy) multiple. We now expect earnings CAGR of 33% over FY15-17F and risks from the ING Vysya consolidation looks fairly low now,'' it added.

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