Kotak Mahindra Bank shares tank 5% after Q4 results. What Morgan Stanley, Nomura, other brokerages are saying

Shares of Kotak Mahindra Bank slipped as much as 5% to their day’s low of Rs 364 on the BSE on Monday, even after the company reported a net profit of Rs 4,026.55 crore for the March quarter of FY26, marking a jump of 13.3% from Rs 3,552 crore posted in the corresponding quarter of the previous financial year.

Net interest income (NII) rose 8.1% year-on-year to Rs 7,876 crore, compared with Rs 7,284 crore in the same quarter last year.

Asset quality improved, with gross NPAs declining to 1.20% from 1.30% QoQ and 1.42% YoY, while net NPAs eased to 0.25% from 0.31% QoQ, the lender said in a regulatory filing on Saturday.

Should you buy, sell or hold Kotak Mahindra Bank shares?

Morgan Stanley has maintained its Overweight rating on Kotak Mahindra Bank with a target price of Rs 500, an upside of 30% from current levels. The brokerage noted that Q4 performance was ahead of expectations, with PAT, NII, NIM, and core PPOP all beating estimates, while slippages and credit costs saw a sharp decline during the quarter. Morgan Stanley expects core PPOP to deliver a CAGR of 19% over FY26–28, supported by improving profitability and balance sheet growth. It also highlighted attractive valuations, with the stock trading at 1.3x FY28 core P/B and 11.5x FY27 core P/E.

Nomura has reiterated its Buy rating on Kotak Mahindra Bank with a target price of Rs 460, implying an upside of 20.1%. The brokerage highlighted a strong operational performance, led by better-than-expected NIMs, controlled operating expenses and lower credit costs. The brokerage also pointed to disciplined growth and improving asset quality trends.

Although Kotak Mahindra Bank was early in flagging pressure on NIMs, Nomura see this challenge potentially spreading across the broader banking sector. The continued mismatch between credit growth and deposit growth is likely to keep the cost of funds elevated for the industry.

Motilal Oswal has reiterated its Buy rating on Kotak Mahindra Bank with a target price of Rs 470 (23% upside). The brokerage noted that the bank delivered a strong quarter, supported by controlled slippages and credit costs, along with an improvement in NIMs. However, management has guided for NIMs to remain largely flat or see a slight decline in FY27 compared to FY26, as the bank focuses on extending deposit tenors, currently around 9–12 months, by offering higher rates on longer maturities. The unsecured portfolio is beginning to stabilise, and credit costs are expected to stay well contained going forward.

Elara Capital has maintained a Buy rating on Kotak Mahindra Bank with a revised target price of Rs 473, down from Rs 511, an upside of 23.2% from current levels. The brokerage noted that Q4 growth stood at 4.1% QoQ, supported by better NIMs and loan growth, with advances expanding at over 16% YoY. Asset quality improved, aided by lower slippages and reduced credit costs. However, it has cut FY27-28 earnings estimates by 2–3% due to concerns around NIM pressure and reduced the target multiple to 2x from 2.3x. The valuation is based on a sum-of-the-parts approach.

Sensex, Nifty today: Catch all the LIVE stock market action here
(Disclaimer: Recommendations, suggestions, views and opinions given by the experts are their own. These do not represent the views of The Economic Times)