Kotak Mahindra Bank’s Share Price Target Raised

Jefferies, a renowned brokerage firm, recently raised its recommendation on Kotak Mahindra Bank Ltd to ‘Outperform’ from ‘Neutral’. The company has set a new share price objective of ₹2,070 for the bank’s stock. This upgrade comes as Jefferies highlights several compelling factors supporting Kotak Mahindra Bank’s upbeat outlook.

Supportive Valuations Post Recent RBI Actions

Jefferies underlined the favorable valuations witnessed following the Reserve Bank of India’s recent measures. According to the brokerage, these efforts have had little impact on the bank’s growth estimates for fiscal year 25-26. Furthermore, Kotak Mahindra Bank displayed solid core operating indicators in its Q4 performance, with headline earnings above expectations after accounting for one-time items.

Positive Growth Outlook

The brokerage firm predicts a healthy growth trajectory for Kotak Mahindra Bank, with loan growth of 20%. It also forecasts strong asset quality, liquidity, and excellent pre-provision operational earnings for the bank. Jefferies anticipates a compound annual balance sheet growth rate of 16% over the next two years, even after adjusting return on asset (ROA).

Analyst Insights on RBI Ban and Tech Priorities

Jefferies estimates a pre-tax financial impact of ₹300-500 crore for Kotak Mahindra Bank due to the RBI prohibition in FY26. The brokerage acknowledged the bank’s focus on core technologies and resilience under the new CEO’s leadership. Despite obstacles, Kotak Mahindra Bank’s technology investments remain competitive, accounting for 10% of total operating expenses.

Valuation and EPS Growth

Jefferies underscored Kotak Mahindra Bank’s enticing prices, citing its parent price-to-earnings (PE) ratio of 10 times the expected earnings for FY26. Over the last year, the bank’s earnings per share have continuously increased, indicating that its financial performance is improving.In a similar vein, JPMorgan, another well-known brokerage firm, raised its rating on Kotak Mahindra Bank to “overweight” from “neutral.” This decision was driven by favorable values following recent RBI initiatives and changes in top management. JPMorgan has set a ₹2,070 price objective for Kotak Mahindra Bank’s stock, matching Jefferies’ favorable stance.

Leading brokerage firms have upgraded Kotak Mahindra Bank’s ratings and revised its price targets, indicating increased confidence in its prospects. Despite regulatory impediments and management changes, the bank’s strong fundamentals, growth potential, and strategic ambitions set it apart in the banking industry.

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Pooja Patel, an accomplished editor with a focus on finance and market trends, contributes to Atom News with a dedication to providing insightful and accurate business news. Pooja's analytical approach adds depth to our coverage, keeping our audience well-informed.