Kotak Mahindra Bank Shares Rise Following Q2 Profit Increase and Brokerage Upgrades

Shares of Kotak Mahindra Bank saw positive movement in early trade on Monday, emerging among the top gainers on the Nifty 50. The stock rose following the release of the bank's financial results for the quarter ended September 30, 2026, which showed a 29.5 percent year-on-year increase in net profit to ₹4,212 crore, primarily driven by higher other income.

At 9:41 am, the stock was trading at ₹438.40 on the NSE, marking an increase of 1.84 percent after touching an early high of ₹446.30 compared to its previous close of ₹430.50. In response to the quarterly performance, several domestic and international brokerages maintained positive views on the lender and adjusted their target prices.

JPMorgan noted that the bank delivered a strong second quarter, outperforming expectations on key operating metrics. The brokerage highlighted that while rate hikes provide tailwinds for margins and earnings, FCNR(B) deposits could create near-term pressure on net interest margins (NIM). However, expected improvements in the current account and savings account (CASA) mix, along with liquidity deployment, are projected to support a recovery. Asset quality trends remain benign, and the expected credit loss (ECL) transition impact is viewed as manageable. JPMorgan maintained its overweight rating and raised its target price to ₹492 from ₹468.

Bernstein kept its market-perform rating with a target price of ₹500, stating that strong balance-sheet growth is driving earnings per share despite margin pressures. Loan growth was led by the corporate and small and medium enterprise (SME) segments. The brokerage pointed out that margin compression remains sharper compared to peers, while asset quality stays stable. Higher provisions largely reflect standard asset buffers.

Motilal Oswal reiterated its buy rating, revising its target price to ₹500 based on projected valuations. Management reportedly reiterated guidance for loan growth at approximately 1.5 to 2.0 times nominal GDP, backed by steady activity in retail and unsecured segments. The firm estimated that the transition to ECL will have a limited impact of under 2 percent on net worth, while raising its FY27 and FY28 earnings estimates.

JM Financial upgraded the stock to a buy rating and raised its target price to ₹500 from ₹415. The brokerage noted that FCNR(B) mobilisation extends liability tenor and provides approximately ₹205 billion of undeployed liquidity to fund loan growth through FY28. Although near-term margins are expected to remain soft as the full-quarter FCNR(B) impact reflects in the December quarter, a recovery is anticipated from the March quarter onward due to liquidity deployment and repo rate transmission.

"Kotak Mahindra Bank's latest quarter performance reflects resilience in core operating metrics despite near-term margin pressures and regulatory transitions. The positive response from major brokerages indicates that institutional confidence remains intact, supported by steady loan growth in corporate and SME segments. For growing businesses and enterprises, a stable banking sector with strong liquidity deployment capabilities is crucial for steady credit availability and long-term economic stability." — Dr. Shishir Gupta, Founder & CEO, StartupLanes