Kotak Mahindra Bank shares hit 52-week high; what's behind the rise?

Shares of Kotak Mahindra Bank Ltd surged 4.55 per cent to scale a 52-week high of Rs 460 in Thursday's trade. The counter was last seen trading 3.86 per cent higher at Rs 457.

The upmove comes as select domestic brokerages maintained a positive outlook on the private lender following its September quarter (Q2 FY27) earnings.

HDFC Securities said Kotak Mahindra Bank's Q2 FY27 earnings met expectations, supported by improved volume growth of around 13 per cent quarter-on-quarter (QoQ), which was partly offset by net interest margin (NIM) compression.

Loan growth stood at 25 per cent year-on-year YoY, aided by advances against FCNR(B) deposits of around Rs 16,100 crore and the transfer from KMIL of around Rs 8,900 crore. Excluding these factors, loan growth remained healthy at around 19 per cent year-on-year, alongside deposit growth of 23 per cent.

The brokerage also highlighted an improvement in asset quality, with gross slippages declining to 0.85 per cent and credit costs at 0.35 per cent. Gross and net non-performing assets (NPAs) improved to 1 per cent and 0.2 per cent, respectively.

"We upgrade our FY27E/FY28E forecasts by 7 per cent/8 per cent, introduce our FY29E estimates and maintain BUY with a revised SOTP-based TP of Rs 480 (standalone bank at 1.9x Sep-28 ABVPS)," it said. The brokerage's previous target price was Rs 460.

HDFC Securities, however, noted, "A cautious approach to loan growth amidst elevated competitive intensity and excess capital (sub-optimal leverage) continue to weigh on RoE."

Religare Broking said Kotak Mahindra Bank delivered a healthy performance in Q2 FY27. "With its strong capital position and improving operating performance providing support, we maintain our BUY rating with a target Price of Rs 518," the brokerage stated.

Elara Capital described the private lender's September quarter performance as steady and recommended an 'Accumulate' rating on the stock, with a target price of Rs 485.