Kotak Mahindra Bank Shares Surge After Strong Q4 Numbers: Here's Why Analysts Are Upgrading The Stock

Kotak Mahindra Bank’s shares surged on Monday morning after most analysts upgraded the private lender’s stock following its strong March quarter results reported on Saturday.

Kotak Mahindra Bank’s Q4 Performance: The bank achieved an 18% year-on-year increase in its standalone profit, reaching ₹4,133.30 crore, with its net interest income rising 13% to ₹6,909 crore. Additionally, its net interest margin expanded from 5.22% to 5.28%.

What are analysts saying: Several brokerage firms, including CLSA, Nomura, and JPMorgan, upgraded the stock. JPMorgan shifted its rating to “overweight” from “neutral,” setting a price target of ₹2,070, citing supportive valuations and strong operating metrics such as notable fee income growth. The bank, according to JPMorgan, is poised to grow its balance sheet at a 16% compound annual growth rate over the next two years.

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Nomura also raised its rating to “buy” from “neutral” with a new price target of ₹2,000, acknowledging elevated slippages but praising the bank’s controlled asset quality.

CLSA upgraded the stock to “buy” while reducing its price target to ₹1,920 due to near-term uncertainties, noting that a significant re-rating depends on the resolution of the Reserve Bank of India’s (RBI) restrictions.

Conversely, Jefferies held its rating at “hold” and lowered its price target to ₹1,790, predicting slower loan growth as the increase in unsecured loans normalizes. Both Jefferies and other analysts highlighted that resolving RBI restrictions and managing potential top management turnover is crucial for the bank’s future performance.

Price Action: Kotak Mahindra Bank shares were up 3.51% at ₹1,600.95 on Monday morning at market open.

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