Kotak Mahindra Bank Upgraded to Buy, Target Price Set at Rs 480: Prabhudas Lilladher Research

Kotak Mahindra Bank Poised for Continued Growth, According to Prabhudas Lilladher's Research Report

Prabhudas Lilladher's research report on Kotak Mahindra Bank (KMB) reveals a positive outlook for the bank's growth prospects. Following a meeting with the bank's Managing Director and Chief Executive Officer (MD&CEO) and senior management, key takeaways were identified. Firstly, the bank is expected to continue growing faster than the overall system without compromising on its Net Interest Margin (NIM).

One of the notable trends observed is the resumption of unsecured growth, while secured growth is expected to remain unaffected. As a result, the unsecured share of the bank's business is anticipated to increase from approximately 9% in March 2026 to 11-11.5%. Furthermore, the bank's technology investments are expected to drive operating efficiency, leading to a reduction in operating expenses as a percentage of assets.

The bank's de-risked balance sheet is also a positive factor, which may not be viewed as a negative despite flat NIM estimates over the fiscal years 2026-2028. The bank's Liquidity Coverage Ratio (LCR) of 134% is expected to support growth in a tight credit cycle. With a core Profit After Tax (PAT) Compound Annual Growth Rate (CAGR) of 17%, the report expects the bank's core Return on Assets (RoA) to improve over the fiscal years 2026-2028, from 1.76% to 1.85%.

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Recommendation

Based on the report's findings, Prabhudas Lilladher recommends a multiple of 2.0x on the bank's FY28 core Asset-Based Value (ABV) and a target price of INR 480. The brokerage firm retains its 'BUY' rating for the bank.