Brokerage firm ICICI Direct has maintained a ‘Buy’ rating on Kotak Mahindra Bank Ltd, citing a revised target price driven by the bank’s recent stock split and its strong quarterly business performance.
On Wednesday, Kotak Mahindra Bank’s shares closed 1.27% lower at Rs 421 on the BSE. The stock has garnered attention following the implementation of the board-approved 1:5 stock split, effective from January 14, 2026. Under this split, each existing share with a face value of Rs 5 has been subdivided into five shares of Re 1 each.
ICICI Direct clarified that this move aims to enhance share affordability and liquidity without impacting the bank’s fundamentals or overall valuation. The brokerage has now set a new target price of Rs 514, suggesting a potential upside of approximately 22% from current levels.
The brokerage values the standalone bank at 2.6 times FY27 estimated Book Value (ABV) and assigns a Rs 127 valuation to its subsidiaries.
In its quarterly update, Kotak Mahindra Bank reported robust growth. As of December 31, 2025, net advances increased 16% YoY to Rs 4,80,229 crore, while total deposits grew 14.6% YoY to Rs 5,42,638 crore, indicating steady liability growth. However, ICICI Direct noted a relatively modest sequential increase in low-cost deposits, with CASA balances up 11.9% YoY. The report pointed out that advances outpaced deposits on a quarter-on-quarter basis, reflecting ongoing pressure on the bank’s funding mix.
On asset quality, the bank demonstrated resilience, with credit costs easing to 79 basis points in Q2 FY26, driven by normalization in microfinance and credit card portfolios.
Analysts continue to see potential in Kotak Mahindra Bank, supported by its strategic initiatives and stable growth trajectory.