Kotak Mahindra Bank shares up 9%, pip Maruti, M&M in m-cap race; here're price targets

Shares of Kotak Mahindra Bank Ltd climbed 9 per cent in Monday's trade, following its December quarter results. In the process, the stock beat Maruti Suzuki India Ltd and Mahindra & Mahindra Ltd in the market capitalisation (m-cap) race.

The stock climbed 9.22 per cent to hit a high of Rs 1,920.85 on BSE. At this price, the bank commanded m-cap of
of Rs 3,81,928 crore. This was higher than Maruti Suzuki India's Rs 3,78,540 crore m-cap and M&M's Rs 3,61,040 crore market value.

"KMB’s Q3FY25 earnings offer both growth and quality, and shall turn out to be among the best in the sector in our view. A marginal uptick in NIM, healthy loan growth, strong deposit growth and a QoQ decline in slippage with a higher PCR are the key positives," Nuvama Institutional Equities said.

With KMB harbouring ambitions of becoming the third-largest private bank in the medium-term, HDFC Institutional Equities expects investments will remain elevated to augment balance sheet growth. It trimmed its FY25 and FY26 estimates by 2-4 per cent, largely owing to elevated credit costs, even as KMB remains buoyant on growth trajectory across segments. This brokerage suggested a target price of Rs 2,040 on the stock.

Given the strong Q3FY25, high CET1 and strong LCR, Nuvama argued that Kotak Mahindra Bank is better positioned to face the current environment. The brokerage upgraded the stock to ‘Buy’ from ‘Reduce’ and suggested a targte price of Rs 2,040 against Rs 1,615 earlier.

"We find the current valuation for the core bank attractive at 1.6 times FY26F BVPS. We reiterate Buy, with a slightly lower target price of Rs 2,110," it said.

MOFSL marginally raised its earnings. After being 'Neutral' on the stock for almost four-and-a-half years when we downgraded KMB at Rs 1,900, it now upgraded the stock to 'Buy' with a target of Rs 2,100.

"We believe KMB offers growth, quality and a safe place to hide in a milieu of weak deposits and high NPLs. The bank has done a particularly commendable job turning in a strong Q3 even as it weathered the RBI ban," Nuvama said.