Kotak Mahindra Bank share price targets after Q4 results

Stock analysts are largely positive on Kotak Mahindra Bank Ltd (KMB), following its March quarter results. Calling Q4 earnings strong on all parameters, they see balanced expansion at the private lender going ahead, with declining credit cost. A couple of brokerages suggested price targets of up to Rs 475 on the scrip, hinting at up to 24 per cent upside.    

Elara Securities called Kotak Mahindra Bank's Q4 results impressive, citing improved operational undertones across key parameters when juxtaposed against peers. The fourth quarter results, it said, were characterized by better net interest income (NII) growth, higher than most peers, on the back of better NIMs and sustained growth momentum. 

"KMB did not use the balance sheet (only amongst a few banks within peers to maintain LCR of 130 per cent plus). Loan growth maintained traction (over 16 per cent YoY growth), more secular in nature. Directionally, asset quality saw good improvement, with reduction in gross slippage feeding into much lower credit cost. The traction in liability has been steady, a key positive for Q4," it said.

The brokerage suggested 'Buy' with a target price of Rs 473, suggesting 23 per cent potential upside for the stock. 

Nirmal Bang Institutional Equities said Kotak Mahindra Bank’s Q4 results were in line with its estimates on net interest income (NII), but pre-provision operating profit was below its estimates at 4.1 per cent, and PAT was higher than estimates by 3 per cent. It suggested 'Buy' on the stock with a target of Rs 454 due to its higher than industry loan growth and likely healthy return on asset of 1.9 per cent over FY26-FY28. 

"We maintain our Buy rating on KMB with an unchanged target price of Rs. 475. We are valuing the standalone bank at 1.9x on its FY28E adjusted book value per share of Rs. 165. Further, we assign Rs 161 per share value to its subsidiaries and associates," said Systematix Institutional Equities. 

For Nuvama, KMB's Q4 beat in profit after tax (PAT) was driven by a sharp decline in credit cost. Provisions declined 36 per cent, as slippage fell 37 per cent sequentially. 

"We retain ‘HOLD’ with a target of Rs 416/1.9 times FY27 book value (BV); the stock trades at 1.7 times FY27E BV. Even though slippages are declining, growth in unsecured needs to further accelerate; management has guided for a gradual NIM moderation in FY27E due to higher TD rates," Nuvama said.

MOFSL said Kotak Bank's strong quarter was marked by controlled slippages and credit costs, along with an uptick in net interest margin (NIM). This brokerage marginally upgraded its earnings estimates by 2 per cent for FY27 and FY28 reiterated 'Buy' with a target price of Rs 470.