Antique Stock Broking has maintained a Buy rating on Kotak Mahindra Bank, while trimming its target price to ₹2,440 from ₹2,540. The revised target reflects concerns around margin compression and rising credit costs following an earnings miss in Q1FY26.
According to the brokerage, earnings fell short due to higher-than-expected decline in net interest margins and elevated credit costs. Loan growth during the quarter was led by the corporate and secured retail segments, while unsecured lending remained weak.
Antique also highlighted that margins are under pressure due to rapid repricing of external benchmark-linked rates (EBLR) and a declining share of unsecured loans. Asset quality deterioration was observed in both the microfinance (MFI) and retail commercial vehicle (CV) segments.
The firm expects a rebound in unsecured credit in FY26/27, which could help support future earnings. However, it has lowered its FY26 and FY27 earnings estimates by 6% and 3%, respectively, owing to margin and credit cost pressures.
Despite the near-term challenges, Antique sees valuations as reasonable at 2.2x one-year forward price-to-book, with a return on assets (RoA) of 2.2% and return on equity (RoE) of 14% over FY26–28.
Disclaimer: This article is based on Antique Stock Broking’s research report and does not constitute investment advice. Please consult a certified financial advisor before making any investment decisions.
