Kotak Mahindra Bank share price: Buy, sell, or hold? Here’s what top brokerages recommend

Kotak Mahindra Bank’s strong Q3 performance has garnered significant attention from brokerages, leading to several upgrades and revised target prices. Here’s a detailed analysis of the latest brokerage opinions:

Motilal Oswal (MOSL)

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  • Rating: Upgraded to ‘Buy’
  • Target Price (TP): ₹2100
  • Key Insights: The brokerage highlighted a steady performance amidst challenging macroeconomic conditions. Asset quality remains strong, with slippages declining quarter-on-quarter (QoQ). Business growth has been healthy, supported by a 2 basis point (bp) improvement in net interest margins (NIM). MOSL slightly raised its earnings estimates and expects Kotak Mahindra Bank to deliver FY26 RoA/RoE of 2.2%/13.5%.

Anand Rathi

  • Rating: Upgraded to ‘Buy’ from ‘Hold’
  • Target Price (TP): Raised to ₹2010 from ₹1950
  • Key Insights: Anand Rathi noted a standout performance in a tough quarter. Healthy loan growth and stable asset quality contributed to a 4.1% QoQ growth in core pre-provision operating profit (PPOP). Faster loan growth and operational efficiencies are projected to drive a 2.2% RoA over FY25-27. The management sees personal loan and credit-card delinquencies as stable, though microcredit delinquencies have not yet peaked. Credit costs are expected to remain stable at 0.6% of advances.

Emkay Global

  • Rating: Maintained ‘Reduce’
  • Target Price (TP): ₹1750
  • Key Insights: Emkay highlighted stable performance in a challenging environment, with a high-yielding personal loan (PL) book of ₹41 billion from Standard Chartered set to be included in Q4. The bank is engaging with RBI to lift the embargo on cards and digital liability banking. Stress in the vehicle finance portfolio was noted, leading to a 2-4% cut in earnings estimates.

Nomura

  • Rating: Maintained ‘Buy’
  • Target Price (TP): ₹2110 (from ₹2170)
  • Key Insights: The brokerage cited healthy performance despite a tough environment, with strong loan and deposit growth. NIMs were stable and ahead of estimates, while overall slippages declined, indicating improved asset quality.

Bernstein

  • Rating: Maintained ‘Market-Perform’
  • Target Price (TP): ₹1950
  • Key Insights: Bernstein observed a good quarter considering the operating environment. Loan and deposit growth were highlighted as key positives, with a marginal rise in NIMs. Opex moderation offset rising credit costs, while return on assets (RoA) remained strong at 2.1%.

Financial Highlights

  • Net Interest Income (NII): Increased 10% YoY to ₹7,196 crore.
  • Profit After Tax (PAT): Grew 10% YoY, supported by higher other income.

Brokerages are divided in their opinions on the stock, with a majority leaning towards upgrades to ‘Buy’ as Kotak Mahindra Bank’s performance showcases resilience and growth potential.

Disclaimer: This article is for informational purposes only and does not constitute financial advice. Readers are advised to consult with their financial advisor before making any investment decisions.