Kotak Mahindra Bank shares rally over 4% on strong Q1 business update; should you buy, sell or hold?

Kotak Mahindra Bank shares have risen over 20 percent since the beginning of the year.

Shares of Kotak Mahindra Bank gained as much as 4 percent to Rs 2,238 on July 8 after it posted a stable performance in the June quarter business update, reflecting steady momentum in both lending and deposit growth, even as gains in low-cost deposits moderated.

The private lender’s loan book expanded to Rs 4.45 lakh crore as of June 30, 2025, marking a 14 percent rise from Rs 3.90 lakh crore a year ago. On a sequential basis, advances were up 4.2 percent from Rs 4.27 lakh crore at the end of March.

Follow our LIVE blog for all the latest market updates

Deposits, too, continued to grow at a healthy pace. End-of-period deposits rose 14.6 percent year-on-year to Rs 5.13 lakh crore, and climbed 2.8 percent over the March quarter figure of Rs 4.99 lakh crore. Average total deposits came in at Rs 4.92 lakh crore, rising nearly 13 percent YoY and 5 percent sequentially.

Growth in low-cost current and savings account (CASA) deposits, however, remained modest. Average CASA deposits stood at Rs 1.92 lakh crore, up 4.2 percent YoY and 2.1 percent QoQ. End-of-period CASA dipped 2.2 percent sequentially to Rs 2.10 lakh crore, though it was still 7.9 percent higher than the year-ago level.

Following the update, Morgan Stanley has maintained an Overweight rating on the lender with a target price of Rs 2,650 per share, which implies an upside of 23 percent from the last close. The brokerage noted that the lender delivered strong growth in its first quarter business update, despite a muted macroeconomic environment. It highlighted the bank’s robust balance sheet expansion, even as broader system-level trends remained subdued. Average deposit growth was particularly strong at 5 percent quarter-on-quarter and 13 percent year-on-year.

Also read: Trump says US 'close' to finalising a trade deal with India

Jefferies has reiterated its Buy call on the stock with a target price of Rs 2,550. The firm pointed to a healthy 14 percent year-on-year and 4 percent sequential rise in loan growth during the June quarter. Total deposit growth, including CASA, improved to 15 percent yearly. While end-of-period CASA deposits dipped 2 percent QoQ, Jefferies said the average CASA base remained stable, indicating resilience in the bank’s low-cost funding profile.

At about 9:20 am, shares of the lender were trading at Rs 2,228, higher by 3.6 percent from the last close on the NSE. Kotak Mahindra Bank shares have risen over 20 percent since the beginning of the year.

Disclaimer: The views and investment tips expressed by investment experts on Moneycontrol.com are their own and not those of the website or its management. Moneycontrol.com advises users to check with certified experts before taking any investment decisions.