Kotak Mahindra Bank shares rise 4% after strong Q1 business update

Shares of Kotak Mahindra Bank surged more than 4% on Tuesday, July 8, after the lender's June quarter business update impressed investors.

The bank's total advances rose 14% year-on-year and 4.2% quarter-on-quarter to ₹4.45 lakh crore. Period-end deposits also showed healthy growth, rising 14.6% YoY and 2.8% QoQ to ₹5.13 lakh crore.

However, current and savings account (CASA) deposits declined 2.2% QoQ, though they were up 7.9% YoY. The CASA ratio fell to 41% from 43% in the fourth quarter of FY25.

Loan growth remained strong, outpacing overall system growth and exceeding expectations. Deposit growth was broadly in line with market estimates. As a result, the credit-to-deposit (CD) ratio rose to 86.7% from 85.5% in Q4FY25.

Analysts at brokerage firms reacted positively to the update. Morgan Stanley maintained its 'Overweight' rating on Kotak Mahindra Bank with a price target of ₹2,650.

It said that the bank showed strong growth despite a muted macroeconomic environment, with balance sheet expansion driven by robust lending.

Morgan Stanley also said that average deposit growth remained strong at 5% QoQ and 13% YoY, although CASA growth was softer at 2% QoQ and 4% YoY.

Jefferies has a 'Buy' rating on the stock with a price target of ₹2,550.

It said the bank delivered healthy loan growth of 14% YoY and 4% QoQ. While period-end CASA deposits fell 2% QoQ, Jefferies said they remained steady on an average basis, contributing to a 15% YoY rise in total deposits.

Shares of Kotak Mahindra Bank are trading 3.03% higher on Tuesday at ₹2,211.95. On a year-to-date basis, the stock has climbed 24%.

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