Kotak Mahindra Bank shares: Q1 biz update gives Uday Kotak's wealth a Rs 4,200 crore lift

Uday Suresh Kotak, who owns nearly 26 per cent stake in Kotak Mahindra Bank Ltd, saw the notional value of his holding surging over Rs 4,200 crore in Tuesday's trade, as the bank's June quarter business update cheered stock investors.       

Uday Kotak held 25.70 per cent stake in Kotak Mahindra Bank, which was valued at Rs 1,13,953 crore in Tuesday's trade against Rs 1,09,711 crore on Monday, up Rs 4,241 crore. In early trade, Kotak Bank's shares rose 4.37 per cent today to hit a high of Rs 2,241 on BSE. This took the year-to-date gains for the banking stock to 25 per cent. 

Uday Kotak is the Founder and Director of the bank. He was the Managing Director & CEO of the private lender till September 2023, prior to becoming Non-Executive Director. At last count, he was worth $16.4 billion, as per the Bloomberg Billionaire index. 

In its Q1 preview note on banking sector, Axis Securities believes business growth momentum for Kotak Mahindra Bank may remain healthy, and that its unsecured book growth remained a key monitorable. Kotak Bank will announce its quarterly results on July 26.

It said the margin compression imminent and fee income would mirror loan growth. Opex ratios may see a slight inch-up while asset quality likely to remain broadly stable, it said adding that credit costs seemed to be under control.

Morgan Stanley has maintained its 'overweight' on Kotak Mahindra Bank, with a target of Rs 2,650. The foreign brokerage reportedly said that Q1 update showed strong growth despite muted macroeconomic climate, adding that balance sheet growth is strong amid muted trends for the system. Jefferies maintained 'Buy' on the stock with a target of Rs 2,550. 

MOFSL also retained 'Buy' on the banking stock. Net advances reported strong traction, growing 14 per cent YoY. This is against MOFSL estimate of 12.4 per cent growth. Deposits remained healthy at 14.6 per cent YoY. CASA deposits declined 2.2 per cent QoQ (up 7.9 per cent YoY).

"KMB’s loan growth remained strong, outpacing system growth and exceeding our expectations, while deposit growth remained healthy and broadly in line with our estimates. As a result, the bank’s CD ratio rose to 86.7 per cent from 85.5 per cent in 4QFY25," MOFSL said.         

JM Financial, which recently met over 25 institutional investors in Singapore and Hong Kong in June, said investors have a conflicting view on whether Kotak Mahindra Bank will be able to outperform on loan growth -- given smaller size compared to other large banks, while outperforming on NIMs -- given aggressive SA/TD rate cuts), and with falling credit cost in FY26.