The shares of Kotak Mahindra Bank tumbled more than 5 percent on January 27 after the company released its results for the October-December quarter of the ongoing financial year 2026. Brokerages have mixed views for the stock, with some cutting forecasts after the lender’s earnings missed estimates.

The shares of the heavyweight lender dropped to Rs 400.5 apiece, recording the sharpest single-day fall since July 2025.

Kotak Mahindra Q3 Results:

Kotak Mahindra Bank on January 24 reported a standalone net profit of Rs 3,446.14 crore for Q3 FY26. This marks a 4 percent year-on-year increase from the Rs 3,305 crore net profit reported in the same quarter of the previous financial year.

The bank's results missed estimates, as analysts had expected a profit of Rs 3,572 crore, according to data compiled by LSEG.

Net Interest Income (NII) increased more than 5 percent YoY to Rs 7,565 crore during the quarter under review, from Rs 7,196 crore a year ago. However, net interest margin (NIM) declined to 4.54 percent from 4.93 percent in the third quarter of the previous financial year.

Asset quality slightly improved sequentially, with gross non-performing asset (NPA) ratio moderating to 1.30 percent as on December 31, 2025, from 1.50 percent a year ago. Net NPA also eased to 0.31 per cent from 0.41 per cent at the end of December 2024.

HDFC Securities on Kotak Mahindra Bank:

HDFC Securities noted that Kotak Mahindra Bank’s Q3 earnings were below estimates, as flattish margins, soft traction in fee income, and relatively high opex intensity was partly offset by higher growth on both sides of the balance sheet.

“Healthy loan growth (16% YoY) was driven by mortgages, business banking, SME segments. Deposit growth (~14% YoY) was strong with CASA ratio at 41.3% (-101bps QoQ) and softer than usual traction in CA balances. While the stress in unsecured segments has largely abated, stress in retail CV segment remains elevated. We are constructive on KMB, expecting growth momentum to sustain in RoA-accretive segments such as LAP, CV/CE, tractors, business banking, and SME, concomitantly reshaping its unsecured segment strategy,” the domestic brokerage said.

It cut the lender’s FY26E/FY27E earnings forecasts by 5/2 percent, factoring in softer margins and fee income. It maintained its ‘Buy’ rating for the stock, with a target price of Rs 495 apiece, implying an upside potential of more than 17 percent from the stock’s previous closing price.

While growth is picking up, higher opex was seen after four quarters of managing it well, noted CLSA. Emkay meanwhile expects Kotak Mahindra Bank to report a relatively moderate RoA of 1.9 percent in FY26E, albeit with an improvement to 2 percent in FY27/FY28E as margins and loss -loss provisions normalize

Motilal Oswal on Kotak Mahindra Bank:

Motilal Oswal said the lender’s NII and other income stood largely in line with its estimates. Operating expenses came in higher than anticipated, while provisions were lower than estimates.

“The decline in the unsecured portfolio has now been arrested, and the bank has reiterated its guidance for stronger growth in the coming quarters, which should also support margins. Overall loan growth is guided at 1.5-2.0x nominal GDP, driven by stable momentum in retail and unsecured segments. Given the continued growth traction, we believe the bank is well positioned to deliver a healthy ~16% loan CAGR over FY26-28E,” the domestic brokerage said.

Motilal maintained its earnings estimate, along with a ‘Buy’ call on the stock with a target price of Rs 500 apiece. This implies an upside potential of more than 18 percent from the stock’s previous closing price.

Kotak Mahindra Bank share price:

Kotak Mahindra Bank shares have fallen more than 5 percent in the past one month, but gained around 4 percent in the past six months.

The stock which currently has a P/E ratio of 22.50, is currently the top loser on benchmark indices Sensex and Nifty, as well as the Nifty Bank index.