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Investing.com - Axis Capital (NYSE:AXS) upgraded Kotak Mahindra Bank (NSE:KTKM) Ltd. (NSE:KMB) stock rating to buy from add on Thursday, while raising its price target to INR2,510 from INR2,320.
The upgrade comes as Axis Capital expects Kotak Mahindra Bank to achieve a return on assets of approximately 2.3% in fiscal year 2027, driven by growth acceleration and net interest margin recovery.
Kotak’s strong franchise in small businesses, mortgage, and mid-corporate segments, combined with normalization of unsecured lending, supports a healthy medium-term growth outlook, according to the research firm.
The bank is positioned to experience net interest margin recovery ahead of peers in the fourth quarter of fiscal year 2026, benefiting from large deposit rate cuts and a lower duration deposit book.
While operating expenses will remain sticky due to upfront investments, Axis Capital anticipates fee growth and productivity gains in the second half of fiscal year 2026 and fiscal year 2027 will drive improved returns, with the bank currently trading below its long-term average valuation multiple.
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