Kotak Mahindra Bank’s share price has tumbled 7% to an intra-day low of Rs 1,977 on the National Stock Exchange. It was the top loser in the Nifty 50 on July 28. The fall in the stock price of Kotak Mahindra Bank came after it reported its quarterly results for Q1 FY26. Here’s what brokerages said on it.
Nuvama on Kotak Mahindra Bank: Earnings were weak compared to business update
Kotak Mahindra Bank reported a strong business update. However, the lender posted weak Q1FY26 earnings with a sharp decline of 32 basis points Quarter-on-Quarter in NIM. The fall in NIM was due to a steep rise in specific credit cost from 64 bps to 93 bps (50% QoQ in value) and a sharp slowdown in YoY fee growth.
Nonetheless, higher trading gains and lower opex helped offset the pressure. Core Pre-Provision Operating Profit (PPOP) grew 4% YoY and fell 2% QoQ. The rise in credit cost was driven by MFI (Microfinance Institution), stress in retail CV (goods), and lower legacy recoveries.
Nuvama Institutional Equities slashed the EPS target by 7% for FY26 and 8% for 27. The brokerage believes that the risk-reward is unfavourable given better earnings by peers.
The brokerage house has a price target of Rs 2,020, which implies a downside of 5%.
“Management called out stress in small, retail CV and clarified there is no build-up of stress in the MSME portfolio, which is 100% secured. Credit cost in MFI peaked in Q1FY26,” said Nuvama.
Motilal Oswal on Kotak Mahindra Bank: Cut earnings estimates on lower NIM
Motilal Oswal cut earnings by 3.5% for FY26 and 1.4% for FY27 amid NIM moderation and slightly elevated provisions. “We estimate KMB’s RoA/RoE at 2.1%/13.4% by FY27,” said Motilal Oswal.
The brokerage house retained its ‘Buy’ rating on the stock, with a target price of Rs 2,400.
Kotak Mahindra Bank’s slippages jumped 33% YoY and 22% QoQ to Rs 1,810 crore (compared to Rs 1,490 crore in Q4 and Rs 1,660 crore in Q3 of FY25). KMB’s GNPA ratio thus increased 6bp QoQ to 1.48%, while NNPA rose 3 bps QoQ to 0.34%.
Kotak Mahindra Bank’s stock performance
The share price of Kotak Mahindra Bank has fallen by over 8% in the last five trading days. However, the stock has given a return of 5% in the last six months and almost 11% from year to date.