Morgan Stanley has maintained its overweight rating on Kotak Mahindra Bank with a target price of ₹2,600 per share, highlighting broad-based loan growth and improving asset quality as key positives in the second quarter (Q2FY26).
The brokerage said loan growth was healthy across segments, supported by both retail and corporate portfolios, while asset quality stress moderated further. Net interest margin (NIM) declined by 11 basis points sequentially as the unsecured loan mix moderated, but Morgan Stanley noted this was a necessary adjustment that strengthens the bank’s balance sheet resilience.
It added that NIM remains the only meaningful catalyst left for near-term re-rating, and expects improvement starting next quarter as funding costs stabilise and yields pick up. Morgan Stanley believes earnings outperformance will accelerate in the coming quarters, leading to a potential valuation re-rating.
The brokerage remains constructive on Kotak’s focus on stable growth, risk moderation, and disciplined asset expansion.
Disclaimer: The views and recommendations above are those of Morgan Stanley. Business Upturn does not endorse them. Please consult a financial advisor before making investment decisions.
