Kotak Mahindra Bank Poised For Strong Growth As RBI Lifts Restrictions, Say Analysts

Kotak Mahindra Bank Ltd. on Wednesday received a boost as the Reserve Bank of India lifted the restrictions that had been imposed on the bank since April 2024. These restrictions had prevented the lender from onboarding new customers through online and mobile channels, as well as issuing new credit cards. The removal of these regulatory barriers has prompted a positive response from analysts.

The lifting of the ban is seen as a key catalyst for Kotak Mahindra Bank's growth, particularly in the credit card and digital customer acquisition segments, positioning it for improved profitability and expansion.

Macquarie maintained its 'outperform' rating on Kotak Mahindra Bank, with a target price of Rs 2,200 per share, saying that the removal of RBI's restrictions will support growth and cushion margins.

The bank's inexpensive valuations and strong expected earnings growth in financial year 2026 further reinforce Macquarie’s positive outlook. The easing of regulatory overhang is considered a welcome relief for Kotak Mahindra Bank, allowing it to capitalise on its core strengths and expand its market presence.

UBS has raised its target price for Kotak Mahindra Bank to Rs 2,100 from Rs 1,950, maintaining a 'neutral' rating. The lifting of the embargo is expected to drive loan and fee growth for Kotak Mahindra Bank, although the bank lost some market share in its credit card segment during the fiscal.

Removal of restrictions will enhance the bank’s ability to acquire new deposit customers, positioning the bank for growth moving forward, UBS said.

Morgan Stanley also maintained an 'overweight' rating, with a target price of Rs 2,290, seeing Kotak's profitability as superior to its peers. The removal of restrictions could spark a re-acceleration in unsecured loan growth, which is expected to support both margins and overall growth.

Meanwhile, Nomura’s analysis of the lifting of the RBI restrictions paints a similarly positive picture, positioning Kotak Mahindra Bank for accelerated growth in its credit card segment and digital customer acquisition.

Goldman Sachs is also constructive on the bank and projected strong earnings growth and improved margins, driven by the revival of its credit card business and digital platform, Kotak 811.