There has been a tremendous rise in the shares of Kotak Mahindra Bank, a leading private sector bank. Shares rose as much as 2.64% after global brokerage firm Citi upgraded the bank’s ratings. At one time it also became the top gainer of Nifty 50.
current stock status
- Closing price on BSE: Rs 1824.70 (up 2.05%)
- Intra-day high: Rs 1835.20 (up 2.64%)
Why did Citi upgrade the rating of Kotak Mahindra Bank?
Target price of Rs 2070
Citi has given buy rating to Kotak Mahindra Bank with a target price of Rs 2070.
Brokerage Opinion:
- Strong Loan Growth: The bank’s personal loan segment is likely to continue growing.
- Removal of regulatory restrictions:
- In the year 2024, RBI had banned the bank from adding new customers through online and mobile banking and issuing credit cards.
- These restrictions were imposed due to shortcomings in IT inventory management.
- Now with the removal of these restrictions the bank will get new opportunities for growth.
Benefit from CCI approval:
- Approval to acquire the unsecured personal loan portfolio of the Indian arm of Standard Chartered Bank (November 2024).
- This acquisition was done for Rs 4100 crore.
- From this purchase:
- The bank’s presence in the retail credit market will increase.
- Focus on salaried customers will be strong.
- Customer-centric growth will accelerate.
Stock performance in one year
Lower level and highest level:
- 3 May 2024: Share’s bottom level Rs 1544.15.
- 23 Sep 2024: Shares hit high of Rs 1953.00 (up 26% in less than 4 months).
present situation:
- The stock is down 6% from its high.
- Citi’s rating upgrade has increased the chances of the stock rising again.
Kotak Mahindra Bank’s growth strategy
Expansion in Retail Market:
- The acquisition of Standard Chartered’s personal loan portfolio is part of the bank’s customer-centric strategy.
- This step will help the bank to increase its customer base and business.
Loan Growth and Focus Areas:
- Rapid growth in personal loan segment.
- Bank’s priority to salaried customers.
