Citi has reaffirmed its ‘Neutral’ rating on Kotak Mahindra Bank with a target price of ₹1,940/share, emphasizing the bank’s measured approach to unsecured lending growth. Management remains confident in improving personal loan delinquencies, enabling disbursements to scale up, while microfinance stabilization could take a few quarters. Stress levels in retail CV and LCV portfolios were noted, but the tractor portfolio remains stable with no stress evident in the SME segment.
The bank aims to grow credit at 1.5-2.0x nominal GDP growth, with volatility in NIMs expected to persist in the near term. Citi appreciates Kotak Bank’s strategic focus on expanding its unsecured lending portfolio while maintaining a cautious approach to macroeconomic risks.
