Kotak Mahindra Bank share price has seen a big leg-up in Monday trade on strong earnings and an Upgrade from Nuvama on the back of the Q3 performance. price have been on an uptrend following its Q3FY25 earnings. The share price of Kotak Mahindra Bank surged by over 9% intra-day.

The Kotak Mahindra Bank’s share price opened at Rs 1,890 apiece and hit an intraday high of Rs 1,929 apiece.

Nuvama, a leading brokerage firm, recently upgraded the bank’s shares rating to ‘Buy’ from ‘Reduce’ and increased the price target by 1,615 to Rs 2,040/share.

Here are 4 reasons why Nuvama upgraded the share price target-

1. Kotak Mahindra Bank: Nuvama sees quality and growth

Brokerage firm Nuvama upgraded the bank’s stock rating from ‘Reduce’ to ‘Buy’, raising its target price from Rs 1,615 to Rs 2,040.

“KMB’s Q3FY25 earnings offer both growth and quality and shall turn out to be among the best in the sector in our view. A marginal uptick in NIM, healthy loan growth, strong deposit growth, and a QoQ decline in slippage with a higher PCR are the key positives,” added Nuvama in its report.

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2. Kotak Mahindra Bank: Nuvama applauds string Q3 despite restrictions

Nuvama commended the bank for its ability to deliver strong results even in the face of regulatory restrictions, such as the RBI’s temporary ban on a segment of its operations.

“The bank has done a commendable job turning in a strong Q3 even as it weathered the RBI ban,” said Nuvama in its report.

The brokerage firm in its report pointed out the bank’s high Common Equity Tier 1 (CET1) ratio and strong Liquidity Coverage Ratio (LCR) position. It added that these metrics indicate that Kotak Mahindra Bank is well-equipped to handle market volatility and economic uncertainties.

3. Kotak Mahindra Bank: Nuvama sees value

Further, Nuvama revised its valuation metrics for the bank, now pegging it at 2.2x book value for FY26E, compared to the previous 1.7x.

We have upgraded KMB to ‘BUY’ with a revised target price of Rs 2,040, up from Rs 1,615. “KMB offers growth, quality, and a safe place to hide in the current environment of weak deposits and high NPLs,” making it a top performer in the sector.

4. Kotak Mahindra Bank: Q3FY25 performance

Kotak Mahindra Bank in its Q3FY25 earnings reported a 10.23% YoY increase in consolidated PAT, reaching Rs 4,701.02 crore. On a standalone basis, the PAT rose by 10% to Rs 3,305 crore. The company’s NII posted a 10% growth, climbing to Rs 7,196 crore from Rs 6,554 crore a year earlier.

However, operational metrics like net interest margin (NIM) and return on equity (ROE) showed a slight decline, standing at 4.93% (down from 5.22%) and 12.43% (compared to 13.83%), respectively.

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Kotak Mahindra Bank share price Vs Nifty

Kotak Mahindra Bank’s share price rally pushed the bank’s market capitalisation to Rs 3.91 lakh crore, placing it ahead of Maruti Suzuki and Mahindra & Mahindra in ranking, as of the current update.

Share price of Kotak Mahindra Bank have delivered a return of 9.93% over the past five days. Over the past month, the stock has a return of 10.28%. Looking at the broader timeline, the stock has provided a return of 7.73% in the past year, and in the last six months, the shares have recorded a return of 9.39%.

Over the past five trading sessions, the Nifty 50 benchmark index has registered a 0.58% gai. However, on a monthly and semi-annual basis, the index has experienced declines of 1.07% and 4.79%, respectively. The Nifty 50 has delivered 9.88% return over the past year.