Kotak Mahindra Bank Limited Just Recorded A 5.2% Revenue Beat: Here's What Analysts Think

Kotak Mahindra Bank Limited (NSE:KOTAKBANK) just released its latest full-year results and things are looking bullish. The company beat expectations with revenues of ₹696b arriving 5.2% ahead of forecasts. Statutory earnings per share (EPS) were ₹91.45, 3.5% ahead of estimates. Following the result, the analysts have updated their earnings model, and it would be good to know whether they think there's been a strong change in the company's prospects, or if it's business as usual. With this in mind, we've gathered the latest statutory forecasts to see what the analysts are expecting for next year.

See our latest analysis for Kotak Mahindra Bank

After the latest results, the consensus from Kotak Mahindra Bank's 32 analysts is for revenues of ₹412.3b in 2025, which would reflect a concerning 41% decline in revenue compared to the last year of performance. Statutory earnings per share are forecast to tumble 21% to ₹71.92 in the same period. Yet prior to the latest earnings, the analysts had been anticipated revenues of ₹806.2b and earnings per share (EPS) of ₹97.47 in 2025. Indeed, we can see that the analysts are a lot more bearish about Kotak Mahindra Bank's prospects following the latest results, administering a large cut to revenue estimates and slashing their EPS estimates to boot.

The analysts made no major changes to their price target of ₹1,893, suggesting the downgrades are not expected to have a long-term impact on Kotak Mahindra Bank's valuation. It could also be instructive to look at the range of analyst estimates, to evaluate how different the outlier opinions are from the mean. Currently, the most bullish analyst values Kotak Mahindra Bank at ₹2,300 per share, while the most bearish prices it at ₹1,547. There are definitely some different views on the stock, but the range of estimates is not wide enough as to imply that the situation is unforecastable, in our view.

One way to get more context on these forecasts is to look at how they compare to both past performance, and how other companies in the same industry are performing. We would highlight that revenue is expected to reverse, with a forecast 41% annualised decline to the end of 2025. That is a notable change from historical growth of 17% over the last five years. By contrast, our data suggests that other companies (with analyst coverage) in the same industry are forecast to see their revenue grow 2.2% annually for the foreseeable future. So although its revenues are forecast to shrink, this cloud does not come with a silver lining - Kotak Mahindra Bank is expected to lag the wider industry.

The Bottom Line

The biggest concern is that the analysts reduced their earnings per share estimates, suggesting business headwinds could lay ahead for Kotak Mahindra Bank. On the negative side, they also downgraded their revenue estimates, and forecasts imply they will perform worse than the wider industry. There was no real change to the consensus price target, suggesting that the intrinsic value of the business has not undergone any major changes with the latest estimates.

Following on from that line of thought, we think that the long-term prospects of the business are much more relevant than next year's earnings. We have estimates - from multiple Kotak Mahindra Bank analysts - going out to 2027, and you can see them free on our platform here.

However, before you get too enthused, we've discovered 2 warning signs for Kotak Mahindra Bank (1 is significant!) that you should be aware of.

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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team@simplywallst.com