Kotak Bank: Outlook brightens

STRUCTURAL CHALLENGES CONTINUE TO WEIGH ON THE LENDER

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KOTAK MAHINDRA BANK has been upgraded to 'Add' from 'Reduce' as near-term operating trends suggest the private sector lender is better positioned than peers to benefit from an improving macro environment.

Plus, the bank is showing early signs of operational momentum under new leadership and an evolving strategy, following a period of underperformance that saw the stock de-rate significantly. Earnings estimates for FY26-28 have been raised by 4-7% on higher net interest income, better fee traction, and improving credit costs. Even after revisions, estimates remain 4-8% below consensus. The revised sum-of-the-parts valuation yields a target price of?2,290, implying a 9% potential upside from current levels.