Kotak Mahindra Bank share price nears 52-week high: Jefferies, JPMorgan & CLSA raise targets after Q2 results -- What next?

Kotak Mahindra Bank shares rose 2.18 per cent to Rs 439.90 on Monday, October 26, following positive commentary from brokerages after the bank's September quarter results.

JPMorgan, CLSA and Jefferies raised their target prices for the stock, while Bernstein maintained its Market Perform rating. Jefferies retained its Buy rating and raised its target price to Rs 520 from Rs 460, citing healthy loan growth, improving core operating trends and stable asset quality.

JPMorgan raises target price to Rs 492

JPMorgan maintained its Overweight rating on Kotak Mahindra Bank and raised its target price to Rs 492 from Rs 468, implying an upside of around 11.8 per cent from the current market price of Rs 439.90.

The brokerage said the bank reported a strong second quarter, with key operating metrics exceeding expectations. It added that interest rate hikes could support margins and earnings.

However, foreign currency non-resident bank deposits (FCNR-B) could weigh on net interest margins (NIMs) in the near term, while an improving current account and savings account (CASA) mix and better liquidity deployment could support a recovery.

CLSA raises target price to Rs 485

CLSA maintained its Accumulate rating on the stock and raised its target price to Rs 485 from Rs 440, indicating an upside of around 10.2 per cent.

Bernstein retained its Market Perform rating with a target price of Rs 500, suggesting a potential upside of around 13.7 per cent from the current market price.

Bernstein flags margin pressure

Bernstein said balance-sheet growth was supporting earnings per share despite margin pressure. It highlighted loan growth led by the corporate and small and medium enterprise (SME) segments.

However, the brokerage noted that margin compression remained sharper than that of peers. It said asset quality remained stable, while higher provisions largely reflected buffers for standard assets.

The bank's operating performance remained steady, although higher provisions weighed on return on assets (ROA).

Jefferies raises target price to Rs 520

Jefferies retained its Buy rating on Kotak Mahindra Bank and raised its target price to Rs 520 from Rs 460. The brokerage said the bank's standalone net profit for the September quarter rose 29 per cent year-on-year to Rs 42 billion, or Rs 4,200 crore, but was slightly below its estimate because of higher operating expenses.

Net interest income (NII) increased 16 per cent year-on-year, supported by 19 per cent growth in core loans, excluding FCNR-B deposits and the consolidation of Kotak Mahindra Investments Ltd (KMIL).

Reported loan growth was higher at 25 per cent, led by the corporate and SME segments. Growth in unsecured retail loans and commercial vehicles and construction equipment remained comparatively slower.

Core deposit growth, excluding FCNR-B deposits, stood at 13 per cent, while reported deposit growth was 23 per cent. CASA deposits grew 11 per cent, and the bank mobilised Rs 553 billion in FCNR-B deposits.

Fee income increased 21 per cent year-on-year, supported by growth in general banking fees, although income from distribution and syndication activities was weaker. Operating expenses rose 14 per cent, while pre-provision operating profit (PPOP) increased 21 per cent.

Jefferies expects the bank's loan growth to normalise towards a compound annual growth rate (CAGR) of 16 per cent over FY27-FY29. It expects some improvement in margins and operating synergies to help offset lower bancassurance fees.

Asset quality remains stable

Jefferies said Kotak Mahindra Bank's asset quality remained healthy during the September quarter. Gross slippages stood at 1.1 per cent of loans in the previous year, while credit costs, excluding FCNR-B, were 0.5 per cent of average loans.

The bank's gross non-performing asset (GNPA) ratio stood at 1 per cent, while its provision coverage ratio was 78 per cent.

On the transition to the expected credit loss (ECL) framework, Jefferies said the management expects the impact to be limited to less than 2 per cent of net worth after tax. The gross impact before tax could be equivalent to 0.6 per cent of loans, while the recurring impact could be 12-15 basis points of loans.

The brokerage expects credit costs to normalise towards around 70 basis points of average loans over FY27-FY29. It has also raised its earnings estimates for the period by 6-7 per cent, factoring in improved core operating trends and the consolidation of KMIL with the standalone bank.

Consolidated profit rises 26 per cent

Kotak Mahindra Bank's consolidated profit increased 26 per cent year-on-year to Rs 56 billion, or Rs 5,600 crore, according to Jefferies. Consolidated profit was 34 per cent higher than the standalone figure.

Profit growth was stronger at Kotak Mahindra Life Insurance and Kotak Capital, while Kotak Securities and Kotak Prime recorded comparatively slower growth.

Jefferies expects the bank's operating profit to increase from Rs 220.7 billion in FY26 to Rs 263.7 billion in FY27, Rs 316.9 billion in FY28 and Rs 369.8 billion in FY29.

Its net profit estimates stand at Rs 140.1 billion for FY26, Rs 175.7 billion for FY27, Rs 201.5 billion for FY28 and Rs 236.3 billion for FY29.

The brokerage projects return on average assets (ROAA) at 1.90 per cent in FY26, 2.05 per cent in FY27, 2.01 per cent in FY28 and 2.05 per cent in FY29. Return on average equity (ROAE) is expected to improve from 11.4 per cent in FY26 to 12.5 per cent in FY27, 12.7 per cent in FY28 and 13.2 per cent in FY29.

Jefferies sees 21 per cent upside in base case

Jefferies said Kotak Mahindra Bank's valuation appeared reasonable, with the stock trading at 1.5 times its estimated adjusted price-to-book value for FY28.

The brokerage compared this with ICICI Bank's valuation of 1.9 times and return on equity of 17 per cent, against 13 per cent for Kotak Mahindra Bank. It said the difference in return on equity justified the valuation gap.

In its 12-month assessment, Jefferies set a base-case target price of Rs 520, implying an upside of around 18.2 per cent from the current market price of Rs 439.90.

Its upside scenario target of Rs 555 indicates a potential gain of around 26.2 per cent, while the downside target of Rs 385 suggests a decline of around 12.5 per cent.

The brokerage expects loan growth CAGR of 18 per cent between FY26 and FY29 in its base case, with average NIMs of around 4.7 per cent. It projects FY27 GNPA and net non-performing asset (NNPA) ratios of 1 per cent and 0.2 per cent, respectively.

Jefferies expects loan growth CAGR of 19 per cent and average NIMs of 4.8 per cent in its upside scenario. In the downside case, it projects loan growth CAGR of 16 per cent and average NIMs of 4.6 per cent.

The brokerage highlighted Kotak Mahindra Bank's deposit franchise, with its CASA ratio at around 43 per cent, and said its risk controls and prudent lending practices could help it navigate a challenging macroeconomic environment.

However, it flagged asset quality pressures in segments such as MSMEs and real estate as risks to monitor.

Kotak Mahindra Bank share price history

Kotak Mahindra Bank shares were trading at Rs 439.90, down Rs 13.20, or 2.91 per cent, from their 52-week high of Rs 453.10, recorded on October 16, 2026. The stock touched a 52-week low of Rs 345.50 on April 2, 2026.

Kotak Mahindra Bank's total market capitalisation stood at Rs 4,36,513.03 crore. The bank is part of the Nifty 50 index and belongs to the private sector bank industry.

The stock has gained 8.91 per cent over the past month, compared with a 2.08 per cent decline in the Nifty 50. However, it has declined 0.52 per cent over the past week, against a 1 per cent fall in the benchmark index.

On a year-to-date basis, Kotak Mahindra Bank shares have fallen 0.80 per cent, while the Nifty 50 has declined 13.34 per cent. Over the past year, the stock has gained 0.59 per cent, compared with a 12.16 per cent decline in the Nifty 50.