Kotak Mahindra Bank share price rallied over 3% after the private bank reported strong earnings growth in the second quarter of FY27, beating estimates across key operating metrics. The banking stock gained as much as 3.73% to Rs 446.15 apiece on the BSE.
The private sector lender reported a 29.5% year-on-year (YoY) growth in Q2FY27 net profit to Rs 4,212 crore, while its net interest income (NII) rose 15.7% YoY to Rs 8,459 crore. However, the bank's net interest margin (NIM) fell to 4.31% from 4.54% in the corresponding period last year.
Following the results, brokerages largely maintained their bullish view on the stock, citing healthy loan growth and improving asset quality, with most raising their target prices.
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Should you buy, sell or hold Kotak Mahindra Bank stock after Q2 results?
JPMorgan reiterated its Overweight rating on Kotak Mahindra Bank shares and raised its target price to Rs 492 apiece from Rs 468 earlier.
JPMorgan said Kotak Mahindra Bank's Q2 delivery underscores broad-based traction across focused customer segments and continued benefits from technology investments and cost discipline. Headline NIMs moderated sequentially on FCNR(B) with full normalization expected by Q4.
According to JPMorgan Kotak Mahindra Bank (core) share is trading at FY27/28E PER (x) of 17.3x/14.8x and remains well positioned to deliver an earnings CAR of 20% over FY 26-29E, underscoring the positive view. It tweaked forecasts to incorporate 2 rate hikes and 50 bps higher risk-free rate (RFR).
JPMorgan has a positive view on Kotak Mahindra Bank and believes the bank is well-positioned to deliver a 20% earnings CAGR over FY26-29E, the best among large banks. It sees scope for further expansion in the bank's price-to-earnings (P/E) multiple as investor confidence in the sustainability of its earnings growth improves.
Bernstein maintained its Market-Perform rating on Kotak Mahindra Bank, with a target price of Rs 500 per share.
The brokerage highlighted that strong balance-sheet growth continues to support earnings per share (EPS), despite pressure on margins. Loan growth remained healthy, driven primarily by the corporate and small and medium enterprise (SME) segments.
However, Bernstein noted that margin compression at Kotak Mahindra Bank remains sharper than that of its peers.
JM Financial said that the FCNR(B) mobilisation lengthens liability tenor and leaves roughly Rs 205 billion of undeployed liquidity to fund above-trend loan growth through FY28E, while reported credit costs at 35 bps and steady cost ratios point to a structurally cleaner earnings base.
It expects near-term margins stay soft as the full-quarter FCNR(B) drag lands in Q3, with recovery from Q4 on deployment and repo transmission.
The brokerage raised FY27 and FY28 EPS estimates by 5% and 7% and values the bank at 2x FY28E P/BV. JM Financial upgraded its rating on Kotak Mahindra Bank to ‘Buy' from ‘Add' and rating its target price to Rs 500 from Rs 415 earlier.
At 10:00 AM, Kotak Mahindra Bank share price was trading 2.38% higher at Rs 440.35 apiece on the BSE.
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