Kotak Mahindra Bank’s shares stayed in the cross‑hair as HSBC upgraded the stock to ‘Buy’ and lifted its price target to ₹520 on Wednesday. The move followed a sharper focus on CEO succession and a spike in loan growth that analysts say could push earnings higher.
HSBC raised its EPS estimates for FY2027‑FY2029 by 1‑14%, citing stronger loan growth and a stable net‑interest margin. The brokerage noted that a potential repo‑rate hike could still present upside risk to the bank’s earnings.
Goldman Sachs mirrored the bullish stance, keeping a ‘Buy’ rating and raising its target to ₹540. Citi stayed on a ‘Buy’ call at ₹465, pointing to a solid balance‑sheet momentum in Q2 and a boost from FCNR deposit mobilisation.
Gross advances jumped 24.7% YoY and 12.7% sequentially, beating Citi’s 20.9% and 9.2% estimates. Excluding the $1.68 billion of FCNR‑linked lending, core advances grew 21.6% YoY and 9.5% sequentially, underscoring the bank’s loan‑expansion pace.
Goldman Sachs added that organic loan growth accelerated from 15% in the previous quarter to 19%, while FCNR flows underpinned deposit growth. The brokerage highlighted the bank’s liquidity cushion at the bottom of the rate cycle and the potential for faster loan growth, especially in unsecured lending, which could lift profitability and earnings.
At a 15× FY2028 price‑to‑earnings multiple, backed by an estimated 19% EPS growth, Kotak Mahindra Bank remains attractively valued. The bank’s guidance for the next quarter remains positive, with analysts watching for repo‑rate decisions and the bank’s ability to sustain its loan‑growth momentum.