Goldman Sachs says Kotak Mahindra Bank‘s (m-cap) market capitalisation (m-cap) could cross the $100 billion mark in fiscal 2026-27 (FY27) as private-sector lenders “prepare for the next phase of transformation”.

On a note, the brokerage has upgraded the stock to ‘buy’ with a target price of Rs 2,135. Shares in Kotak Bank rose 2.64% to close at 1,707 rupees on Wednesday, valuing the bank at $42.8 billion (Rs 3.4 trillion).

“The key debate is the bank’s risk appetite and ability to drive sustainable growth by leveraging excess capital and sweating its infrastructure to drive higher returns on equity. We believe the bank is well-positioned for this round of invested capital position and successfully executed its retail asset strategy to push m-cap to $100 billion by FY27. Given these tailwinds and our 12-month price target of 28%, we upgrade it to Neutral ‘Buy’ from ‘Neutral’ shares to our conviction list,” Goldman analysts Rahul Jain and Hardik Shah said in a note.

Only two Indian companies (Reliance Industries and Tata Consultancy Services) are worth more than $100 billion.
HDFC Bank is the only domestic bank to achieve this milestone. However, its m-cap has slipped, currently at $96.4 billion.

The brokerage expects the bank’s profitability to grow significantly in the coming years.

“We expect core operating profit to grow at a CAGR of CAGR of 22% (compared to less than 15% CAGR from 2018-19 to 2021-22 or 22), net profit will grow at a CAGR of 18% from FY22 to FY24-25 (21% adjusted for FY22 provision write-off),” the analyst duo said.

This optimism stems from the bank’s favourable environment amid rising interest rates, a strong capital base, a mature digital platform and a best-in-class asset return environment.

Shares of Kotak Bank have risen 26% in the past two years, underperforming the Bank Nifty index, which has risen 55%.