Shares of Kotak Mahindra Bank fell by as much as 5 percent in early trading on Monday, despite the bank reporting an increase in fourth-quarter profit. The stock declined due to mixed underlying signals and cautious commentary regarding growth and profitability. It reached a low of ₹363 before slightly recovering to ₹375.85 on the NSE, reflecting a decrease of about 2 percent and positioning it among the top losers in the Nifty 50 index.
The private sector bank announced a 13 percent year-on-year increase in standalone net profit, totaling ₹4,027 crore for the March quarter. This growth was supported by steady increases in net interest income and a substantial reduction in provisions. Although profitability surpassed expectations, market sentiment seemed to reflect concerns over the sustainability of margins and growth momentum.
Brokerage firms provided varied assessments of the company’s outlook following the earnings report. Morgan Stanley retained an overweight rating with a target price of ₹500, highlighting Q4FY26 as a strong quarter characterized by attractive valuations. The firm noted that profit after tax, net interest margin, net interest income, and core pre-provision operating profit all exceeded estimates, alongside a notable decrease in slippages and credit costs. Morgan Stanley emphasized management’s optimistic commentary, viewing the bank as a significant pick given the macroeconomic risks amid strong earnings resilience.
Bank of America (BofA) also maintained a buy rating with a target of ₹460, citing an earnings beat due to net interest margin expansion and lower provisions. BofA observed improvements in asset quality and margins, with a return on assets growing to 2.1 percent. The brokerage anticipates that loan growth momentum will increase alongside a recovery in unsecured lending and ongoing declines in credit costs.
Conversely, Macquarie adopted a neutral position with a target price of ₹460, suggesting that easing credit costs may bolster profitability. It pointed out that while the earnings beat was largely influenced by reduced credit costs and retail segment improvements, margins remained stable thanks to a better deposit profile.
Elara Capital maintained a buy rating but adjusted its target price to ₹473, citing uncertainties in the near term. The firm noted that the bank has been achieving improved core performance despite a challenging environment and identified it as a relatively safer option for earnings growth, with a return on assets around 2 percent. Elara emphasized that valuations remain attractive compared to large private banks, supporting a favorable risk-reward outlook.
Ambit Capital, however, took a more cautious stance by maintaining a sell rating and a target price of ₹380. The brokerage expressed concerns about the bank’s ability to balance rapid growth with sound underwriting practices, warning that a shift towards higher-yield unsecured lending might increase operational expenses and lead to credit cost volatility. Ambit expects the return on assets to remain around 2 percent and cautioned that excess capital could put pressure on return on equity over the medium term.
Published on May 4, 2026.
