UBS upgraded Kotak Mahindra Bank to ‘Buy’ from its earlier ‘Neutral’ rating, citing strong growth prospects across business segments.
The brokerage has also raised its price target to ₹2,450, implying a potential upside of 26% from Thursday’s closing levels.
According to UBS, Kotak offers the best play across key financial service segments through its wholly owned subsidiaries, with a larger contribution from non-lending businesses compared with peers.
UBS mentioned that segments such as asset management and wealth management could grow 1.4-1.7x faster than lending, driven by a structural shift in household savings and investment patterns.
The brokerage added that Kotak’s healthy growth outlook, easing margin and credit cost pressures, faster growth potential, and superior ROA are likely to support a re-rating of the stock.
Within the broader financial sector, UBS said that India’s profit pool could nearly double in the next five years, and expressed preference for Cholamandalam Investment & Finance and Power Finance Corporation among NBFCs, and SBI Life Insurance Company in insurance.
Of the 44 analysts tracking Kotak Mahindra Bank, 27 have a ‘Buy’ rating on the stock, 12 recommend a ‘Hold’ and five have a ‘Sell’ rating. UBS now has the highest price target for Kotak Mahindra Bank.
Kotak Mahindra Bank shares are now trading 1.47% higher on Friday at ₹1,973.30. The stock has risen over 10% so far in 2025.
