Brokerage Upgrades Drive Kotak Mahindra Bank’s Share Price Target Higher
Kotak Mahindra Bank’s share price has gained positive traction from brokerages, with both Jefferies and JPMorgan upgrading their ratings and raising their price targets. Jefferies has upgraded the bank to ‘Outperform’ from ‘Neutral’ and set a share price target of ₹2,070, citing compelling valuations, strong loan growth, solid asset quality, and healthy pre-provision operating profits. Jefferies believes that Kotak Mahindra Bank’s compound balance sheet growth could reach 16% annually over the next two years, despite the normalization of return on assets (ROA).
Jefferies also noted that the impact of the recent RBI ban on Kotak Mahindra Bank’s financials is likely to be limited, with an estimated impact of ₹300-500 crore at the PBT level. The brokerage highlighted the bank’s focus on strengthening its core technology and resilience, with its tech spending at 10% of opex, which compares favorably to its larger peers.
JPMorgan has also upgraded Kotak Mahindra Bank to ‘Overweight’ from ‘Neutral,’ citing supportive valuations following the recent RBI action and senior management departure. JPMorgan has set a price target of ₹2,070 on Kotak Mahindra Bank’s stock. Both Jefferies and JPMorgan have acknowledged the consistent EPS upgrades that Kotak Mahindra Bank has witnessed over the last year.
Factors Contributing to the Positive Outlook
* Robust loan growth of 20%, driven by strength in both corporate and retail segments
* Solid asset quality with low non-performing assets
* Healthy liquidity and pre-provision operating profits
* Focus on digital transformation and technology investments
* Experienced and capable management team
Overall, the upgrades and positive outlook from brokerages reinforce the market’s confidence in Kotak Mahindra Bank’s long-term growth prospects and its ability to navigate the current market challenges.
