Revenue Beat: Kotak Mahindra Bank Limited Exceeded Revenue Forecasts By 5.4% And Analysts Are Updating Their Estimates

Kotak Mahindra Bank Limited (NSE:KOTAKBANK) just released its annual report and things are looking bullish. The company beat expectations with revenues of ₹697b arriving 5.4% 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.

View our latest analysis for Kotak Mahindra Bank

Taking into account the latest results, the 31 analysts covering Kotak Mahindra Bank provided consensus estimates of ₹411.0b revenue in 2025, which would reflect a disturbing 41% decline over the past 12 months. Statutory earnings per share are forecast to plummet 22% to ₹71.41 in the same period. Before this earnings report, the analysts had been forecasting revenues of ₹758.9b and earnings per share (EPS) of ₹96.60 in 2025. It looks like sentiment has declined substantially in the aftermath of these results, with a large cut to revenue estimates and a pretty serious reduction to earnings per share numbers as well.

The consensus price target fell 6.8% to ₹1,892, with the weaker earnings outlook clearly leading valuation estimates. Fixating on a single price target can be unwise though, since the consensus target is effectively the average of analyst price targets. As a result, some investors like to look at the range of estimates to see if there are any diverging opinions on the company's valuation. The most optimistic Kotak Mahindra Bank analyst has a price target of ₹2,299 per share, while the most pessimistic values it at ₹1,547. This shows there is still a bit of diversity in estimates, but analysts don't appear to be totally split on the stock as though it might be a success or failure situation.

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. Compare this with our data, which suggests that other companies in the same industry are, in aggregate, expected to see their revenue grow 2.7% per year. It's pretty clear that Kotak Mahindra Bank's revenues are expected to perform substantially worse than the wider industry.

The Bottom Line

The most important thing to take away is that the analysts downgraded their earnings per share estimates, showing that there has been a clear decline in sentiment following these results. Unfortunately, they also downgraded their revenue estimates, and our data indicates underperformance compared to the wider industry. Even so, earnings per share are more important to the intrinsic value of the business. Furthermore, the analysts also cut their price targets, suggesting that the latest news has led to greater pessimism about the intrinsic value of the business.

With that in mind, we wouldn't be too quick to come to a conclusion on Kotak Mahindra Bank. Long-term earnings power is much more important than next year's profits. 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 1 warning sign for Kotak Mahindra Bank 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.