Kotak Mahindra Bank Shares Rise As Analysts Expect Strong Growth Post Lifting Of Ban

Kotak Mahindra Bank Ltd. shares rose following lifting of restrictions imposed on the lender by the Reserve Bank of India.

The restrictions, imposed in April last year, had prevented the lender from onboarding new customers through online and mobile channels, as well as issuing new credit cards. Removal of these regulatory barriers has prompted a positive response from analysts.

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 removal of RBI's restrictions would support growth and cushion margins.

UBS has raised its target price for Kotak Mahindra Bank to Rs 2,100 from Rs 1,950, maintaining a 'neutral' rating. 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.

Further, Morgan Stanley also maintained an 'overweight' rating, with a target price of Rs 2,290, seeing Kotak's profitability as superior to its peers. Nomura and Goldman Sachs view the development as a key positive, positioning the bank for accelerated growth in its credit card segment and digital customer acquisition.

Kotak Mahindra Bank's stock rose as much as 2,25% during the day to Rs 1,987.7 apiece on the NSE. It was trading 1.98% higher at Rs 1,982.1 apiece, compared to a 0.24% advance in the benchmark Nifty 50 as of 9:40 a.m.

It has risen 14.14% in the last 12 months. Total traded volume so far in the day stood at 7.1 times its 30-day average. Relative strength index was at 53.88.

Thirty-five of the 44 analysts tracking the bank have a 'buy' rating on the stock, four recommend a 'hold' and five suggest a 'sell', according to Bloomberg data. The 12-month analysts' consensus target price on the stock is Rs 2,073.40, implying a upside of 4.7%.