JP Morgan has maintained an ‘Overweight’ rating on Kotak Mahindra Bank (KMB), setting a target price of ₹2,100 per share, implying a 7.8% upside potential from the current market price.
Key takeaways from the report:
- The removal of regulatory restrictions is seen as eliminating a major overhang on the stock.
- Kotak Mahindra Bank has witnessed a slowdown in new customer acquisitions, net credit card additions, and credit card spending market share, which has impacted short-term growth.
- A revamped digital app and stabilizing credit card slippages at the system level suggest that Kotak Mahindra Bank will likely ramp up customer acquisitions.
- Unsecured loan growth is expected to accelerate in the near to medium term, supporting overall lending expansion.
- The bank has maintained its target of increasing unsecured loans to 15% of its book (vs. 10.5% as of December 2024), signaling a shift towards higher-margin lending.
With business normalization, a renewed focus on unsecured lending, and digital enhancements, JP Morgan remains optimistic about Kotak Mahindra Bank’s growth trajectory.
Disclaimer: The above article is for informational purposes only and does not constitute financial advice. Investors are advised to consult their financial advisors before making any investment decisions.
