A few lenders including IndusInd Bank, Bank of Baroda (BoB) and Kotak Mahindra Bank (KMB) recently issued business updates for the September quarter (Q2FY26).
Nomura has shared its key takeaways and stock views post these updates.
Kotak Mahindra Bank
Kotak Mahindra Bank reported a solid performance in its pre-quarterly update, with net advances rising 15.8 per cent YoY and 4.0 per cent QoQ. Average net advances grew 14.6 per cent YoY and 4.0 per cent QoQ.
Total deposits grew 14.6 per cent YoY and 3.1 per cent QoQ (period end), while average deposits were up 14.4 per cent YoY and 3.7 per cent QoQ. CASA deposits saw a healthy 11.2 per cent YoY and 6.7 per cent QoQ growth, improving the CASA ratio by 144 basis points QoQ to 42.3 per cent. The loan-to-deposit ratio (LDR) rose 70 basis points QoQ to 87.5 per cent.
Nomura said KMB posted strong growth in both loans and deposits. “We expect the focus to remain on credit cost and NIM trajectory in Q2 along with management commentary on the outlook,” it said, maintaining a Neutral rating.
Bank of Baroda
Bank of Baroda’s overall loan growth was robust at 11.9 per cent YoY and 4.0 per cent QoQ, led by a 13.8 per cent YoY and 11.0 per cent QoQ jump in overseas advances. Domestic advances grew 11.5 per cent YoY and 2.5 per cent QoQ, while domestic retail advances rose 17.6 per cent YoY and 6.4 per cent QoQ.
Deposit growth remained steady at 9.3 per cent YoY and 1.9 per cent QoQ, with domestic deposits up 9.7 per cent YoY and 2.4 per cent QoQ. The domestic loan-to-deposit ratio increased by 200 basis points YoY and 170 basis points QoQ to 85.3 per cent.
Nomura noted that both loan and deposit growth improved sequentially for BoB. “We expect NIMs and commentary on the growth outlook to remain key monitorables for Q2FY26 results,” it said, maintaining a Neutral stance.
IndusInd Bank
IndusInd Bank’s update showed a weak trend, with loans down 8.3 per cent YoY and 1.9 per cent QoQ. Deposits declined 5.5 per cent YoY and 1.8 per cent QoQ. Retail deposits were nearly flat, up 1.5 per cent YoY, while bulk deposits dropped 11.0 per cent YoY and 3.4 per cent QoQ.
CASA deposits fell 18.9 per cent YoY and 4.0 per cent QoQ, pushing the CASA ratio down 510 basis points YoY and 70 basis points QoQ to 30.8 per cent. The LDR remained stable QoQ at 84 per cent.
Nomura said it will look for more clarity from the full Q2FY26 results. With the appointment of the new CEO, Rajiv Anand, it expects commentary around strategy, risk controls, and the bank’s transition plan to be key. The brokerage maintained a Buy rating on the stock.
Target prices
Nomura suggested a target of Rs 960 on IndusInd Bank as it retained ‘Buy’ rating on the scrip. It has ‘Neutral’ views on Bank of Baroda and Kotak Mahindra Bank, with targets of Rs 240 and Rs 2,150, respectively.