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HomeMarket NewsKotak Bank analysts see limited re-rating room, but expect stock to test ₹2,650 levels
Despite the highest price target, Jefferies has trimmed its earnings estimates for Kotak Mahindra Bank by 2% to 3% over financial year 2026-2028, while projections for its Return on Equity (RoE) for next year is lower than its peers.
Nearly 65% of the 43 analysts that have coverage on Kotak Mahindra Bank continue to recommend "buying" the stock after its September quarter results that were reported over the weekend.
The results were largely in-line with expectations with marginal improvement in asset quality and a decline in profitability, both for the bank, and for most of its subsidiaries on a year-on-year basis.
11 analysts tracking the stock have a "hold" rating, while four others have a "sell" recommendation. A consensus estimate of price targets implies a potential upside of 8.5% from current levels. Here's a look at what various brokerages had to say:
Jefferies
The brokerage has the joint-highest price target on the street for Kotak Mahindra Bank at ₹2,650, along with ICICI Securities, Dolat Capital, and Yes Research.
Despite the highest price target, Jefferies has trimmed its earnings estimates for the lender by 2% to 3% over financial year 2026-2028, while projections for its Return on Equity (RoE) for next year is lower than its peers.
Jefferies also sees limited room for the valuations to re-rate going forward.
Morgan Stanley
While Jefferies sees limited room for re-rating, Morgan Stanley expects one as the earnings outperformance accelerates for Kotak Bank. It liked the lender's broad-based loan growth as well as moderation in asset quality stress.
It sees the bank's Net Interest Margins (NIMs) as the only catalyst left and expects that to start turning around from the next quarter.
Morgan Stanley is "overweight" on Kotak Bank with a price target of ₹2,600.
UBS
The brokerage maintained its "buy" rating on the stock with a price target of ₹2,450.
UBS believes that as Kotak Bank's asset quality improves, it will gradually begin to focus on growth in the unsecured loan business.
CLSA
The brokerage has a "hold" rating on the stock with a revised price target of ₹2,350.
It said that while CASA ratio was stable after several quarters of consistent declines, it would wait for another quarter to see if this is a blip or a trend reversal.
On the flip side, growth in fee income, which is a key driver for Kotak Bank's Return on Assets (RoA), remained sluggish.
Shares of Kotak Mahindra Bank ended 1.5% lower on Friday at ₹2,192.5. The stock has risen 10% in the last one month.
