Jefferies maintains a Hold rating on Kotak Mahindra Bank, with a target price of Rs 2080, offering an 11% upside. The bank posted Q2 profit of Rs 33 billion, up 5% year-on-year, largely in line with estimates. However, Net Interest Margins (NIMs) underperformed peers, declining by 31 basis points year-on-year, and are expected to continue under pressure in the coming quarters.
The brokerage also highlighted concerns over slippages from credit card and MFI loans, warning that credit costs could rise further. Despite these challenges, the bank’s deposit growth of 15% year-on-year and loan-to-deposit ratio (LDR) of 87% were seen as positives.
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