Axis Bank Overtakes Kotak Mahindra to Become 4th Most-Valued Bank, Analysis of Market Reactions and Share Price Targets

Indian financial industry witnessed a significant shift as Axis Bank surpassed Kotak Mahindra Bank to secure the position of the fourth most-valued bank, primarily fueled by a robust performance in the March quarter.

The unexpected turn of events was triggered by a sharp decline in Kotak Mahindra Bank’s shares following stringent restrictions imposed by the Reserve Bank of India (RBI) on its customer onboarding procedures, particularly through online and mobile banking channels.

Currently, Axis Bank’s market capitalization stands at Rs 3,42,488.70 crore, while Kotak Mahindra Bank’s market capitalization dipped to Rs 3,29,597.28 crore after a substantial 10% drop in its share price post the RBI restrictions.

Brokerage firms such as Motilal Oswal and Religare Broking provided varying perspectives on the developments. Religare Broking expressed optimism in Axis Bank’s performance post the quarterly earnings, citing improved margins and healthy growth in profitability. The firm maintained a ‘Buy’ rating on Axis Bank, setting a target price of Rs 1,275.

Nirmal Bang, after analyzing the Q4 results, upgraded its estimates for Axis Bank for FY25 and FY26, anticipating sustained growth supported by healthy loan expansion, margin improvements, and efficient cost management.

Notably, Axis Bank’s recent decision to extend Amitabh Chaudhry‘s tenure as MD & CEO till December 2027 has garnered attention, with Prabhudas Lilladher highlighting the bank’s potential for further growth and narrowing the market valuation gap with ICICI Bank.

Contrastingly, Motilal Oswal expressed concerns over the potential impact of the RBI restrictions on Kotak Mahindra Bank’s growth prospects, particularly in retail products. The brokerage reiterated a Neutral rating for the bank, revising the target price to Rs 1,900.

As the volatility in the banking sector unfolds, investors and analysts closely monitor the market responses to the contrasting fates of Axis Bank and Kotak Mahindra Bank, each navigating distinct challenges and opportunities in the evolving financial landscape.