Buy Kotak Mahindra Bank; target of Rs 2500: Motilal Oswal

Motilal Oswal is bullish on Kotak Mahindra Bank recommended buy rating on the stock with a target price of Rs 2500 in its research report dated December 31, 2025.

Broker Research

January 01, 2026 / 10:52 IST

Buy

Motilal Oswal's research report on Kotak Mahindra Bank

Kotak Mahindra Bank (KMB) continues to align its balance sheet expansion with a disciplined growth framework of ~1.5-2.0x nominal GDP while steadily improving business granularity through retail and SME-led growth. NIMs are expected to remain range-bound in the near term, with 3QFY26 margins likely to be flat, largely due to temporary interbank yield distortions and short-term liquidity deployment at lower yields. The impact of the recent 25bp rate cut is expected to flow through primarily in 4QFY26. A repricing and the migration toward ActivMoney sweep deposits are expected to gradually ease funding costs, although benefits from term-deposit repricing will accrue with a lag. Despite near-term noise, absolute NII continues to grow, reinforcing confidence in earnings stability.

Outlook

We estimate KMB to deliver robust return ratios, with RoA/RoE at 2%/12.7% by FY27E. Retain BUY with a TP of INR2,500 (2.5x FY27E ABV+ INR775 for subs).

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