Jefferies upgrades Kotak Mahindra Bank's share price target: 5 reasons why

Kotak Mahindra Bank share price: Jefferies said, “We upgrade Kotak to Overweight following supportive valuations post recent RBI actions."

Kotak Mahindra Bank share price: Brokerage firm Jefferies upgraded its rating on Kotak Mahindra Bank Ltd to 'Outperform' from ‘Neutral’. Jefferies suggested a share price target of ₹2,070. It cited compelling valuations, strong 20 per cent loan growth, solid asset quality, liquidity and healthy pre-provision operating profits. Kotak Mahindra Bank's compound balance sheet could be at 16 per cent annually over the next two years, it said even after return on asset (ROA) normalisation.

Kotak Mahindra Bank share price: A man walks past the Kotak Mahindra Bank branch in New Delhi, India. (Reuters)

Jefferies said, “We upgrade Kotak to Overweight following supportive valuations post recent RBI actions. The impact of the same on FY25-26 growth should be minimal and the bank showed in Q4 print that core operating metrics remain strong with headline profit adjusted for one-offs was 8 per cent ahead of JPMe.”

Jefferies on RBI ban on Kotak Mahindra Bank

The brokerage said that the total impact of RBI ban on on Kotak Mahindra Bank's financials is likely to at ₹300-500 crore at PBT level (2 per cent of F26 PBT at top end. It noted, “The new CEO outlined priority on strengthening core tech and resilience. Notably, KMB's tech spends at 10 per cent of opex compares favorably with large peers though absolute numbers maybe lower given scale.”

Valuations at 10 times F26E parent PE are compelling , the foreign brokerage noted adding that Kotak Mahindra Bank has seen consistent EPS upgrade over last one year.

JPMorgan on Kotak Mahindra Bank

Brokerage firm JPMorgan upgraded Kotak Mahindra Bank to "overweight" from its earlier rating of “Neutral”, citing supportive valuations post the recent RBI action and senior management departure.

JPMorgan has a price target of ₹2,070 on Kotak Mahindra Bank stock.