Motilal Oswal has maintained its buy rating on Kotak Mahindra Bank with a target price of ₹2,500 per share, citing steady business momentum and a resilient profitability profile. The brokerage believes the bank is well positioned to sustain a return on assets (RoA) of around 2%, supported by disciplined growth, stable margins and improving asset quality trends.
Motilal Oswal expects net interest margins (NIMs) to remain largely range-bound, though with a mild upward bias, as the bank benefits from a strong liability franchise and calibrated loan pricing. While competitive pressures remain, the brokerage said Kotak Mahindra Bank’s conservative balance sheet strategy should help protect margins over the medium term.
On asset quality, Motilal Oswal noted that credit costs, which peaked in Q1, are now expected to trend down gradually. Management has guided for a comfortable credit cost range of 55–60 basis points over the medium term, reflecting improving portfolio seasoning and tighter underwriting standards. The brokerage sees this as a key support for earnings stability.
Looking ahead, Motilal Oswal expects the bank to deliver robust return ratios, with RoA and RoE projected at around 2% and 12.7% respectively by FY27. The brokerage remains constructive on Kotak Mahindra Bank’s ability to balance growth and profitability while maintaining one of the strongest risk profiles in the sector.
Disclaimer: The views and recommendations above are those of Motilal Oswal. Business Upturn does not endorse them. Please consult a financial advisor before making investment decisions.
