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Investing.com - UBS upgraded Kotak Mahindra Bank Ltd. (NSE:KMB) from Neutral to Buy and raised its price target to INR2,450.00 from INR2,300.00.
The upgrade follows an 11% correction in Kotak’s share price from its recent peak and underperformance against the Nifty and Bank Nifty by approximately 11% and 13% respectively over the past six months.
UBS views Kotak as "the best play in all key financial service segments" through its fully owned subsidiaries, noting that non-lending businesses contribute about 40% of Kotak’s value compared to just 9-14% for peers.
The bank is expected to achieve a loan compound annual growth rate of approximately 17% over the medium term, supported by improving sector tailwinds and the Reserve Bank of India’s liquidity support measures that may ease deposit pressure.
At 1.7 times September 2026 estimated price-to-book value, UBS believes the stock offers "favourable long-term risk-reward," despite projecting a near-term net interest margin decline due to recent repo rate cuts that could limit net interest income growth in the second and third quarters.
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