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Investing.com - BofA Securities upgraded Kotak Mahindra Bank Ltd. (KMB:IN) from Neutral to Buy and raised its price target to INR2,700.00 from INR2,250.00.
The upgrade follows what BofA describes as a "substantial de-rating" in Kotak’s valuations over the past three years, during which the bank faced challenges including leadership transition, regulatory issues, and credit quality concerns.
BofA Securities now believes Kotak is positioned for a "sustainable turnaround" in both growth and return on assets (RoA), with the bank expected to show higher responsiveness to system credit growth compared to its peers.
The firm cited Kotak’s second-quarter 2026 results as evidence supporting its view that peaking credit costs and an improving loan mix will push return on assets above 2% by the end of fiscal year 2026.
These improvements are expected to drive a "meaningful valuation re-rating" from current multiples, which stand at approximately 2x price-to-book value on a standalone basis, according to BofA Securities.
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