Despite lackluster Q1 earnings, the stock’s recent chart patterns and support at the 200-DMA suggest a possible price recovery, according to an analyst.
Kotak Mahindra Bank shares have declined 6% in the last month. And according to SEBI-registered analyst Anupam Bajpai, its technical charts suggest that the stock may be setting up for a potential rebound.
Last week, the lender reported weaker-than-expected June quarter (Q1) results. Analysts noted that while profit grew and asset quality improved, muted NII growth and margin pressure limit near-term upside.
Technical Trends
On its charts, Bajpai highlighted that the stock faced resistance near the 20-day moving average and formed a Doji candlestick pattern on July 23, which typically signals indecision or a potential reversal.
Following this, the Kotak Mahindra Bank stock began to decline. Over the subsequent few sessions from July 28 to 30, the candlesticks were entirely formed outside the lower Bollinger Band, and during this time, the Relative Strength Index (RSI) was below 30.
These indicators suggest that the stock had entered an oversold zone, often considered a potential setup for a rebound in price, he noted.
Bajpai added that on July 31, the stock gave a positive signal by closing above its 200-day moving average, a key long-term support level. And on Friday, the stock once again took support from the 200-day moving average and showed strength.
According to him, this price behavior, along with technical indicators, points to a bullish outlook in the near term. If the momentum continues, the stock may move upward towards the 20-day moving average, which is currently placed around ₹2,127.
Kotak Mahindra Bank Q1 Earnings
The bank reported a 9% year-on-year rise in standalone net profit to ₹4,034 crore, aided by lower provisions. Net interest income (NII) grew 2% to ₹6,299 crore, while net interest margin declined to 5.08% from 5.57% a year ago due to funding cost pressures.
It witnessed deterioration in asset quality, with gross slippages (1.7%) and credit costs (93bps) rising owing to elevated stress in the micro-finance institutions’ portfolio and retail CV segments, even as the stress in personal loans and credit cards segments plateaued.
HDFC Securities cut their FY26E/FY27E estimates by ~3%/1%, factoring in elevated opex and credit costs. They maintained a Buy rating with a revised target price of ₹2,310. Meanwhile, Antique maintained a Buy rating and revised its target price lower to ₹2,440.
However, data on Stocktwits shows that retail sentiment has moved from ‘bearish’ to ‘neutral’ last week.
Kotak Mahindra Bank shares have risen 12% so far this year.
For updates and corrections, email newsroom[at]stocktwits[dot]com.<