Kotak Mahindra Bank shares surge 4% to a 10-week high on solid Q1 loan & deposit growth. Analysts bullish; stock up 25% in 2025.
💹 Kotak Mahindra Bank Shares Rally Over 4%, Hit 10-Week High
Shares of Kotak Mahindra Bank, one of India’s top private sector lenders, surged over 4% on Tuesday, July 8, after the bank released a robust June quarter (Q1 FY26) business update. The stock jumped 4.26% to ₹2,241, marking a 10-week high, amid investor enthusiasm over strong lending and deposit growth.
At current levels, Kotak Mahindra Bank shares have risen nearly 25% in 2025, outpacing most of its private banking peers. This sharp rally has also boosted its market capitalization by about ₹1.10 lakh crore, taking it to ₹4.43 lakh crore.
📝 Highlights Of Kotak’s Q1 Business Update
💰 Loan Book Expands By 14% YoY
Kotak Mahindra Bank reported a healthy 14% year-on-year (YoY) growth in advances, taking its loan book to ₹4.45 lakh crore at the end of June 2025. On a quarter-on-quarter (QoQ) basis, lending rose by 4.2%, up from ₹4.27 lakh crore in March.
📊 Comparison:
- Q1 FY25: ₹3.90 lakh crore
- Q4 FY25: ₹4.27 lakh crore
- Q1 FY26: ₹4.45 lakh crore
This steady expansion underlines the bank’s strong foothold in retail and corporate lending segments, even amid a high interest rate environment.
🏦 Deposits Grow 14.6% YoY, CASA Profile Steady
The lender also posted an impressive 14.6% YoY growth in total deposits, which stood at ₹5.13 lakh crore at the end of the June quarter. On a sequential basis, deposits were up 2.8% from ₹4.99 lakh crore in March.
- Average total deposits: ₹4.92 lakh crore, up nearly 13% YoY and 5% QoQ.
💸 CASA: Slight Softness But Still Healthy
Kotak’s low-cost Current Account Savings Account (CASA) deposits remain strong, though with some moderation:
| CASA Metric | YoY Change | QoQ Change |
|---|---|---|
| Average CASA | ₹1.92 lakh crore (+4.2%) | (+2.1%) |
| EOP CASA | ₹2.09 lakh crore (+7.9%) | (-2.2%) |
While end-of-period CASA dipped 2.2% sequentially, it still shows nearly 8% growth YoY, indicating a stable low-cost funding base.
💬 What Analysts Are Saying: Bullish Targets From Morgan Stanley & Jefferies
Following this strong business update, global brokerages reaffirmed their positive outlook on Kotak Mahindra Bank.
🚀 Morgan Stanley: Overweight, ₹2,650 Target
Morgan Stanley retained its Overweight rating with a target price of ₹2,650, citing:
✅ Robust loan book expansion
✅ Continued resilience in low-cost funding
✅ Well-managed asset quality amid global macro uncertainties
💹 Jefferies: Buy, ₹2,550 Target
Jefferies also reiterated its Buy call, with a target price of ₹2,550, highlighting:
✅ Solid balance sheet growth
✅ Healthy consumer demand driving retail credit
✅ Stable CASA ratios despite an industry-wide moderation in low-cost deposits
🧐 What’s Fueling Kotak Mahindra Bank’s Outperformance?
📈 Strong Growth Momentum
Unlike many private sector peers struggling to grow deposits or maintain CASA, Kotak has consistently shown double-digit growth in both loans and deposits, supported by diversified retail and corporate lending.
🏦 Solid Balance Sheet & Low NPAs
Kotak Mahindra Bank is known for its prudent risk management, keeping gross NPAs (non-performing assets) among the lowest in the sector. This helps it navigate periods of volatility better.
📊 Investors Seek Safe Havens
With the Indian stock market facing intermittent profit booking and global geopolitical concerns (like tariffs recently discussed by ex-US President Trump), investors have preferred financials with strong fundamentals, pushing Kotak’s stock higher.
🏆 Kotak Mahindra Bank: Among The Best Performers In 2025
Kotak’s stock is up nearly 25% year-to-date, outperforming larger rivals like HDFC Bank and ICICI Bank. This reflects investor confidence in:
✅ Kotak’s consistent earnings visibility
✅ Conservative capital strategy
✅ Growth potential from India’s rising credit demand
🚀 Should You Buy Kotak Mahindra Bank Stock Now?
✅ The Bullish Case
- Steady loan & deposit growth: Signals robust demand and strong franchise strength.
- Healthy CASA ratio: Even with slight moderation, still among the best in class.
- Attractive analyst targets: Implies up to 18% upside from current levels.
⚠️ Risks To Watch
- Any sharp decline in CASA or spike in NPAs could pressure valuations.
- Global macro uncertainties, like currency fluctuations or higher US rates, may impact foreign investor flows.
📌 Quick Takeaways
✅ Kotak Mahindra Bank shares soared over 4% to ₹2,241, hitting a 10-week high after a solid Q1 update.
✅ Loans grew 14% YoY, deposits up 14.6% YoY, while CASA remains largely stable.
✅ Morgan Stanley & Jefferies maintain bullish views, with targets up to ₹2,650.
✅ The stock has rallied 25% in 2025, outperforming most private sector peers.
💡 Bottom Line: A Bluechip Worth Watching
Kotak Mahindra Bank continues to demonstrate why it’s one of India’s most respected private lenders. With a robust balance sheet, consistent growth, and healthy low-cost funding, it remains a top pick among financial stocks.
If you’re a long-term investor looking to ride India’s economic and credit boom, Kotak’s latest numbers suggest it’s a bank you may want to keep on your radar—or even in your portfolio.
Disclaimer: This article may have been partially or fully generated with the help of AI tools. While we strive for accuracy and clarity, please verify critical information from official sources.
