Kotak Bank shares gain 30% since April as earnings outlook brightens
Kotak Mahindra Bank shares experienced a significant rise, reaching a record high as growth prospects improved. The stock has shown a substantial increase of nearly 30% since April. Analysts anticipate stronger earnings attributed to various financial factors such as credit growth and higher lending rates. Improved asset quality and lower credit costs are expected to enhance profitability. This…
Mumbai: Kotak Mahindra Bank shares have surged to a record high on Thursday, buoyed by improving growth prospects and heightened expectations of stronger earnings. The stock has experienced a notable gain of nearly 10% in October, marking its best monthly performance since March 2025, and a substantial rise of around 30% since the start of April.
As of the BSE close, the shares were trading at ₹457, up by 3.86% from the previous trading session, having previously reached an intraday peak of ₹460 per share. Although Kotak underperformed from 2021 to 2024, delivering largely flat returns, the stock has rebounded impressively, up approximately 25% in 2025 and around 7% so far in 2026.
Analysts now anticipate earnings improvement, supported by burgeoning credit growth, the utilization of funds garnered through foreign currency non-resident (FCNR(B)) deposits, and the passing on of higher lending rates. Enhanced asset quality, reduced credit costs, and improved cost ratios are also poised to bolster profitability.
According to Axis Securities, Kotak Mahindra Bank is positioned to deliver a return on assets ranging from 2.1-2.2% and a return on equity between 12-14% for the fiscal years 2027-2029, positioning the bank second among large private sector banks, trailing only ICICI Bank. Siddharth Rajpurohit, lead analyst for banking and non-lending financials at Systematix Institutional Equities, attributes the bank's resurgence to a recovery in growth, easing credit costs, and stable core margins.
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