Private sector lender Kotak Mahindra Bank Ltd. shares emerged in the top gainers on the Nifty 50 pack in trade, after receiving an upgrade from international brokerage Citi Research on January 2.
Citi Research upgraded Kotak Mahindra Bank to a 'buy', with a target price of Rs 2,070 per share, indicating an upside of nearly 16 percent from the previous session's closing price.
According to the brokerage, Kotak Bank's strong loan growth momentum will continue to grow. The bank's personal loan segment is expected to gather pace, supported by improved delinquency trends, signaling healthier asset quality.
Credit cost expectations, which have already factored in higher levels, remain a point of focus. Citi also notes a tweak in the bank's medium-term growth outlook, emphasizing its relatively low beta as a stable investment characteristic.
A significant trigger for the bank's future performance would be the lifting of regulatory restrictions, which could unlock further growth opportunities.
In 2024, the Reserve Bank of India barred the private lender from onboarding new customers through its online and mobile banking channels and issuing fresh credit cards as deficiencies in the areas of IT inventory management was found.
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In November 2024, the Competition Commission of India's (CCI) approved for the bank to acquire the unsecured personal loans portfolio of Standard Chartered Bank's India unit.
Kotak Mahindra Bank had initially announced this acquisition in October, agreeing to purchase Standard Chartered's India personal loan book for Rs 4,100 crore.
This move is part of Kotak's strategy to bolster its presence in the retail credit market and drive customer-centric growth. The acquisition will help the bank scale up its operations and increase its focus on the affluent salaried segment of customers.
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