Bernstein has maintained a ‘Market Perform’ rating on Kotak Bank with a target price of ₹1,950/share, reflecting a potential upside of 9.7% from the current market price (CMP) of ₹1,777.90.
Key Insights:
- Low-Cost Deposit Challenge: Bernstein highlights that building a robust base of low-cost deposits is critical for lenders aspiring to rank among the top 5 universal banks. A large physical branch network is seen as indispensable for acquiring deposit balances.
- Concerns on Deposit Growth: Kotak Bank’s recent trends indicate challenges in building a solid low-cost deposit base. Bernstein warns that the window to establish such a base may be closing rapidly.
- Strategic Importance: The ability to capture an increasing share of low-cost deposits is pivotal to long-term competitiveness and profitability in the banking sector.
While Kotak Bank has shown strength in other areas, Bernstein’s cautious outlook stems from its inability to build a strong trajectory for low-cost deposit growth, which could impact its long-term strategic goals.
Disclaimer: The above analysis is based on inputs provided and is for informational purposes only. It does not constitute financial advice. Readers are advised to consult their financial advisors before making any investment decisions.
