Kotak Mahindra shares rise after Q2 profit, target upgrades

Kotak Mahindra shares rose in early trading on October 26, 2026, after the bank reported a 29.5% year-on-year increase in September-quarter net profit to ₹4,212 crore, driven by higher other income. JPMorgan, Motilal Oswal and JM Financial raised their price targets, although analysts continued to flag near-term pressure on lending margins.

Key Takeaways

• Shares traded 1.84% higher at ₹438.40 at 9:41 a.m., below their early-session high of ₹446.30.
• Three brokerages raised price targets, while Bernstein retained a market-perform rating.
• Foreign-currency deposit funding remains a near-term margin concern, despite expectations for stronger lending.

Table of Contents

• Kotak Mahindra shares pare their early advance
• Brokerages lift targets, but ratings remain divided
• Funding costs set the next earnings test
• Conclusion

Kotak Mahindra shares pare their early advance

The stock rose about 3.6% in early trading on the National Stock Exchange before easing to ₹438.40 at 9:41 a.m. Its previous close was ₹430.50. The quoted gain was an intraday snapshot, not a closing return.

The earnings covered the quarter ended September 30, 2026. Kotak’s quarterly results archive lists FY2027 and second-quarter materials, including a press table, investor presentation, press release and earnings-call recording.

Brokerages lift targets, but ratings remain divided

JPMorgan retained its overweight rating and raised its target to ₹492 from ₹468. It described the second quarter as strong, with key operating metrics exceeding its expectations, and said an improving current-account and savings-account mix could support a margin recovery.

Motilal Oswal reiterated its buy rating and lifted its target to ₹500. It increased earnings estimates by 3% for FY27 and 7% for FY28. The brokerage said management reiterated loan-growth guidance of around 1.5–2.0 times nominal GDP growth, supported by retail and unsecured lending.

JM Financial upgraded the stock to buy and raised its target to ₹500 from ₹415. Bernstein remained more cautious, retaining a market-perform rating and a ₹500 target. Bernstein said corporate and small-business lending were supporting balance-sheet growth, but margin compression remained sharper than at peers.

These targets and earnings revisions are brokerage assessments, rather than company guidance or assured future share prices.

Funding costs set the next earnings test

Foreign Currency Non-Resident (Bank), or FCNR(B), deposits were a recurring concern in the analysts’ assessments. JM Financial said this funding extends the maturity of liabilities and leaves about ₹205 billion of undeployed liquidity available to support above-trend loan growth through FY28.

That creates a timing issue: funding costs can weigh on margins before the money is deployed into loans. JM Financial expects the full-quarter FCNR(B) effect to keep margins soft in the December 2026 quarter, followed by recovery from the March 2027 quarter as liquidity is deployed and repo-rate changes feed through.

Credit quality offered a counterweight. JPMorgan and Bernstein described asset-quality trends as benign. Motilal Oswal said the transition to expected-credit-loss provisioning was expected to affect net worth by less than 2%; that remains an estimate, not a completed transition outcome.

Conclusion

The December-quarter results will provide the next test of how deposit funding costs and loan deployment affect margins. The anticipated March-quarter recovery remains a brokerage forecast, not a confirmed improvement.

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