Kotak Mahindra Bank (KMB IN) – Q2FY27 Result Update – Sustained healthy loan growth a key to re-rating – BUY
Published on 25 Oct 2026
KMB saw a good quarter with a beat on all core metrics. While reported NIM was down 22bps QoQ to 4.3% due to FCNR and day count, margins may have bottomed out given Q3FY27 would see impact of (1) FCNR deposits being deployed into assets and (2) repo rate transmission. Adjusted for FCNR/KMIL, loan growth was strong at 7.8% QoQ and 19% YoY. Unsecured loan accretion, that slowed down over Q2FY25 to Q2FY26, has been consistently growing, given moderation in stress; this is likely to sustain. While we raise loan growth by 100bps in FY28 to 16% YoY, there are upside risks to loan growth and NIM as unsecured growth has bounced back. We maintain multiple at 2.0x on Sep’28 core ABV but raise TP to INR510 from INR500. Retain ‘BUY’.
