Kotak Mahindra Bank shares fall 2% today after mixed Q2 results; brokerages upbeat -- should you buy or sell?

Current valuation is justified due to Bank's growth with quality proposition.

Kotak Mahindra Bank stock fell 2 percent in the opening trade on Monday, October 27, even with a largely positive set of brokerage reviews following the lender’s July-September quarter results. Kotak Mahindra Bank shares were trading at Rs 2,143 on NSE in the early session, against the previous close of Rs 2,187.

The private sector bank reported a modest 2.7 percent year-on-year fall in net profit to Rs 3,253 crore for Q2 FY26, while maintaining strong growth in advances and stable asset quality.

Kotak Mahindra Bank Q2 results snapshot

Kotak Mahindra Bank’s net interest income (NII) for the quarter grew 4 percent on-year to Rs 7,311 crore, while the bank’s net interest margin (NIM) stood at 4.54 percent. Net advances rose 16 percent YoY to Rs 4.63 lakh crore, and deposits increased 14 percent to Rs 5.11 lakh crore. Asset quality improved, with gross non-performing assets (GNPA) declining to 1.39 percent from 1.49 percent a year earlier, and net NPA easing to 0.32 percent. CASA ratio held firm at 42.3 percent; capital adequacy stood at a strong 22.1 percent.

Brokerage views: Buy or Sell Kotak Mahindra Bank stock?

Brokerages broadly shared a positive stance on the stock despite the slight decline in quarterly profit. Analysts see steady growth and improving asset quality as positives, but expect near-term earnings momentum to remain subdued until margins rebound and fee income strengthens.

• UBS issued a Buy rating on Kotak Mahindra Bank stock with a target price of Rs 2,450 per share, saying that lower operating expenses offset weaker non-interest income. It also cited the management that credit costs are expected to remain moderate.
• Jefferies also shared a Buy call with a higher target of Rs 2,650, saying the results were better than expected on NII and cost control. However, it trimmed FY26-28 earnings forecasts slightly by 2-3 percent. While the brokerage noted the healthy loan growth and improving credit quality, it sees limited near-term room for valuation re-rating.
• CLSA maintained a Hold rating on Kotak Bank stock, raising its target price to Rs 2,350, describing the quarter as “mixed” due to treasury losses offset by strong cost control and stable CASA. It flagged slow fee income growth and said it would watch if the CASA improvement sustains.
• Motilal Oswal Financial Services (MOSL) shared a Buy call with a Rs 2,500 target, highlighting easing asset quality stress and management’s guidance for NIM expansion in the coming quarters.
• Nuvama has a Hold rating with a Rs 2,082 target, citing NIM compression and relatively weaker slippage improvement compared with peers.

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