Kotak Mahindra Bank analysts expect up to 31% upside after investor day; Check price targets

Brokerage firms CLSA and UBS reiterated bullish their views on Kotak Mahindra Bank Ltd. following separate management interactions, highlighting the lender's focus on profitable growth, technology investments, retail expansion and deposit mobilisation.

CLSA maintained its "Outperform" rating on the stock with a price target of ₹440, implying an upside of about 15% on Wednesday's closing price of ₹381.

UBS also reiterated its "Buy" recommendation on the stock, seeing a potential upside of nearly 31%, with a price target of ₹500.

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CLSA

CLSA said Kotak has identified four customer cohorts as key growth areas — affluent, middle-class, SME and corporate customers. According to the brokerage, one of the key strategic changes underway at the bank is a shift from a product-led approach to a customer-centric model focused on overall profitability generated by each customer relationship.

The brokerage also highlighted management's emphasis on technology investments aimed at lowering the cost of doing business over time. While Kotak is stepping up efforts to attract digital customers through its 811 platform, it also intends to continue expanding its physical branch network.

CLSA noted that management remains focused on maintaining profitability and does not appear willing to sacrifice return on assets (RoA) to accelerate growth, despite having excess capital. The bank reiterated its loan growth guidance of 1.5-2 times the nominal GDP growth.

UBS

UBS highlighted the bank's continued focus on strengthening its low-cost deposit franchise through a combination of digital channels and branch expansion.

On the lending side, the brokerage said Kotak continues to prioritise retail and MSME segments, while remaining opportunistic in corporate lending. Management also reiterated its target of growing loans at 1.5-2 times nominal GDP and remains open to inorganic opportunities if required.

UBS further noted management's aspiration to become India's third-largest bank by group profit by 2030, with technology expected to play a key role in driving operating efficiencies and cost optimisation.

Among the 41 analysts that cover Kotak Mahindra Bank, 34 of them have a "buy" rating, five say "hold" and two have a "sell" rating.

The average 12-month target price stands at ₹461.81, implying potential upside of about 21% from the current market price.

Shares of Kotak Mahindra Bank are trading little changed on Thursday at ₹381.5. The stock is down 14% so far this year.