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Shares of <a target="_blank" href="https://mintgenie.livemint.com/stocks/kotak-mahindra-bank-S0003043">Kotak Mahindra Bank</a> ended at ₹1,704.50/share, up 2.49% on the BSE in Wednesday's trade, after global brokerage firm Goldman Sachs upgraded the stock to a 'buy' from the 'neutral' tag earlier and raised the target price to ₹2,135 from ₹1,984, implying a 26 per cent potential upside. Goldman Sachs also added the stock to its buy conviction list — the list of stocks it expects to outperform, <a target="_blank" href="https://www.financialexpress.com/market/kotak-mahindra-bank-market-cap-to-hit-100bn-by-fy27-says-goldman-sachs-upgrades-stock-rating-target-price/2584897/">Financial Express </a>reported.&nbsp;

Kotak Mahindra Bank is estimated to deliver a +20% CAGR for net profit, driven by its strong franchise, low-cost deposits, which translate to a best-in-class cost of deposits, and significant investments in its distribution network, among other factors. "We believe Kotak Bank could join the ranks of banks with U $100 billion in market cap by FY27E as this cycle has all the factors in place for it to deliver sustainable and strong volumes and operating profit growth as it puts its excess capital to work," Goldman Sachs said.

The private sector lender currently has a market capitalization of around $42 billion. "We raise our earnings estimates by 7%/13%/13% for FY23E/FY24E/FY25E, mainly driven by higher NIMs as well as better operating leverage as discussed above," the report added.

Kotak Mahindra Bank has gained market share, specifically in savings and current account deposits, by 30bps and 40bps, respectively, over the last three years. The analyst at Goldman Sachs said that the bank still has the scope to accelerate the market share, particularly in savings deposits, as it has the scope to offer higher savings deposits and retain customers.

Further, the lender has been investing in technological upgrades to its core systems as well as ramping up digital offerings. This could provide a significant boost to the lending business, according to Goldman Sachs.

The stock touched a 52-week-high of ₹2,253 on October 27th, 2021 and a 52-week-low of ₹1,626 on July 30th, 2021 indicating that at the current level the stock is trading at a discount of 32.12% from its 52-week high and 4.57% away from its 52-week low.The Bank reported a year-on-year increase in standalone net profit of 64.5 per cent to ₹2,767 crore for the quarter ended March 31, 2022. The private lender reported a net profit of ₹1,682 crore in the year-ago period.As of March 31, 2022, the bank's gross non-performing assets (GNPA) was 2.34 per cent as against 2.71 per cent in the previous quarter, while net non-performing assets (NNPA) stood at 0.64 per cent versus 0.79 per cent in Q3FY22.The lender's net interest income (NII) for Q4FY22 increased to ₹4,521 crore, from ₹3,843 crore in the same quarter last fiscal, up 18 per cent.An average of 39 analysts polled by MintGenie have a 'buy' call on the stock.Disclaimer: The views and recommendations made above are those of individual analysts or broking companies, and not of MintGenie.

Goldman Sachs sees Kotak Mahindra Bank's market-cap crossing $100 billion by 2027; upgrades target price

The stock touched a 52-week-high of ₹2,253 on October 27th, &nbsp;2021 and a 52-week-low of ₹1,626 on July 30th, 2021 indicating that at the current level the stock is trading at a discount of 32.12% from its 52-week high and 4.57% away from its 52-week low.

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