Kotak Bank Eyes Breakout After Q1 Update: SEBI RA Flags Bullish Momentum

Kotak Mahindra Bank shares rose over 3% on Tuesday after the bank posted a strong operational update for the first quarter (Q1 FY26), with a double-digit increase in both deposits and advances.

The bank's total advances rose 14% year-on-year to ₹4.45 lakh crore. Deposits also showed healthy growth, increasing 14.6% YoY to ₹5.13 lakh crore.

SEBI-registered analyst Vijay Kumar Gupta believes that Kotak Bank continues to deliver a best-in-class bank performance with strong earnings growth, superior asset quality, and ongoing digital transformation. Valuation remains premium, but improved credit momentum and tech leverage offer sustained upside in the medium term. He’s watching for fresh breakout confirmation from the current levels. 

On the valuations front, Gupta notes that the stock trades at 28 times price to earnings (P/E) ratio and a price to book (P/B) of 4.2 times, setting it at a premium compared to its peers such as ICICI Bank, HDFC and Axis Bank. The forward P/E is expected to moderate to 24–26 times, and the discounted cash flow (DCF) fair value zone is seen between ₹1,980 and ₹ 2,100. This valuation premium reflects balance sheet strength, cost control, and tech scale-up, according to him.

On the technical charts, he sees immediate resistance at ₹2,240–₹2,260; and a breakout above this level would confirm a fresh upside. Support now lies between ₹2,150 and ₹ 2,175. If it breaches this level, then a stronger support sits around ₹2,055. 

Its Relative Strength Index (RSI) is bullish at 61, rising from a recent base, and indicating renewed momentum. The Moving Average Convergence Divergence (MACD) has turned positive with an expanding histogram that further confirms a short-term bullish setup. 

Volumes have also picked up alongside the breakout, which is a classic sign of trend reversal continuation.

In other recent developments, the private lender has tightened its digital loan exposure in line with the RBI’s guidance, which shows an approach towards risk control. A new head of digital banking has been appointed, signaling an acceleration in fintech partnerships. 

The 811 platform has been upgraded to target younger demographics and digital-only accounts. Additionally, the bank is aiming for a cost-to-income ratio below 40%, supported by a renewed focus on its B2B2C strategy.

Kotak Mahindra Bank shares have gained 24% year-to-date (YTD). 

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