CLSA has maintained its hold rating on Kotak Mahindra Bank while raising its target price to ₹2,350 per share, calling the second quarter (Q2FY26) a “mixed” performance marked by treasury-related losses but resilient core operating trends.
The brokerage said Q2 profit before tax (PBT) was about 3% below its estimate, primarily due to treasury losses, though core PBT was around 2% higher. Customer asset growth remained steady at 13% year-on-year, while the NIM decline of 11 basis points was in line with expectations.
CLSA noted that operating expenses were well-controlled and have consistently beaten estimates in recent quarters. The CASA ratio stabilised after several quarters of decline — a positive sign that may indicate the start of a trend reversal. However, fee income, a key driver of return on assets (ROA) for Kotak, remained sluggish.
The brokerage added that while asset quality trends were stable and slippages were in line with estimates, credit costs were marginally higher. CLSA said it would wait for another quarter of confirmation before turning more positive.
