HSBC upgraded Kotak Mahindra Bank to ‘Buy’ with a target price of Rs 520 per share. The bank got a boost after reporting strong second-quarter loan growth of 24.7 percent. Analysts said the lender showed better leadership clarity, which helped shares jump 3.82 percent on Tuesday to Rs 431.90.
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The outlook for Kotak Mahindra Bank stock has turned increasingly bullish, with HSBC upgrading the lender to ‘Buy’ and raising its target price to Rs 520 per share, implying more than 20 percent upside from Tuesday’s close. The brokerage has turned constructive on the bank following greater clarity over its leadership, stronger loan and earnings growth prospects, and potential upside to earnings from repo rate hikes.
HSBC raised its earnings per share (EPS) estimates for FY27-FY29 by 1-14 percent, factoring in stronger loan growth and steady net interest margins (NIMs). The brokerage also sees potential repo rate hikes as an upside risk to the bank’s earnings.
The upgrade follows a 3.82 percent jump in Kotak Mahindra Bank shares on Tuesday to Rs 431.90 after the lender reported a strong second-quarter business update. Despite the rally, the stock remains down 2.6 percent so far this year, compared with a 12.9 percent decline in the Nifty 50. The lender has a market capitalisation of about Rs 4.3 lakh crore.
Kotak Mahindra Bank’s end-of-period net advances rose 24.7 percent year-on-year to Rs 5.77 lakh crore in the second quarter. Deposits increased 23.2 percent to Rs 6.51 lakh crore, while CASA deposits grew 11.3 percent to Rs 2.39 lakh crore.
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The business update had already drawn positive commentary from Citi and Goldman Sachs. Citi retained its ‘Buy’ rating with a target price of Rs 465, saying Kotak Mahindra Bank delivered a marked improvement in balance-sheet momentum during the quarter.
Citi noted that gross advances growth of 24.7 percent year-on-year and 12.7 percent sequentially was ahead of its estimates of 20.9 percent and 9.2 percent, respectively. Even excluding FCNR(B)-linked exposure, core advances grew 21.6 percent year-on-year and 9.5 percent sequentially, comfortably ahead of the brokerage’s expectations.
Goldman Sachs also retained its ‘Buy’ call and raised its target price to Rs 540 per share. The brokerage highlighted accelerating organic loan growth, strong deposit mobilisation, greater leadership clarity and the bank’s liquidity position. It expects the stock to benefit from both earnings compounding and a valuation re-rating as profitability improves.
Leadership uncertainty has eased after the Reserve Bank of India approved Anup Kumar Saha’s appointment as Managing Director and CEO for a three-year term beginning January 1, 2027. Saha, who joined Kotak Mahindra Bank in January 2026 and is currently a whole-time director, will succeed Ashok Vaswani.
The interest-rate cycle could provide another earnings tailwind. Nearly 60 percent of economists polled by Reuters expect the RBI to raise the repo rate by 25 basis points at its policy decision on Wednesday. Kotak Mahindra Bank could be relatively sensitive to higher rates, with around 63 percent of its loans linked to external benchmarks.