Kotak Mah. Bank (KOTAKBANK)

FairStock Score: 55/100 — STEADY

Score breakdown: P/E: 1/3 · ROCE: 0/2 · Growth: 1/2 · Dividend: 0/1

Key Financials

AI Analysis

AI-generated, general educational analysis — not personal investment advice.

Here is what you need to know about Kotak Mahindra Bank. This is a large private-sector bank with a rock-solid balance sheet — zero debt-to-equity and a current ratio of 4.54 — so it is a high-quality stalwart. But quality alone is not enough. The valuation snapshot shows the stock around Rs 370, about 38 percent above its Graham number of Rs 268, and the current header price near Rs 391 is even higher. That means you are paying a premium for safety, and there is no margin of safety for new money. The FairStock score is only 2 out of 10, a weak verdict. Profit growth on a year-on-year basis looks fine at 22.5 percent, but the quant earnings momentum signal is flashing a sell with computed profit growth of minus 17 percent. That divergence is concerning; it suggests the headline number may be stale or that momentum has turned negative. Return on equity at 11.2 percent and return on capital employed at 8.2 percent are okay, but not exciting for a private bank. Dividend yield is practically zero. On the quant side, liquidity is excellent. The stock scores 99.7 out of 100 on liquidity, and a one-crore order moves the price by only 3.5 basis points. That means big investors can buy or sell without much impact. The five-day volume imbalance is 75 percent, meaning institutional money is accumulating over the last week. Volume anomaly is neutral, so there is no weird spike. Mean reversion is also neutral right now. The z-score is 0.74, meaning the stock is only about 1.7 percent above its 20-day average of Rs 377, so it is not stretched. The half-life of 11.6 days suggests it tends to revert, but there is no strong edge at this level. Interestingly, Kotak is extremely cheap relative to SBI in the cointegrated pairs data — the spread z-score is minus 2.86, which is rare. That provides some relative-value support and could trigger a near-term bounce. But I would not chase this. Valuation is expensive, earnings momentum is negative, and the FairStock score is weak. If you already own Kotak, you could hold because the balance sheet is safe and liquidity is strong, but I would not add new money. For tactical traders, a mean-reversion bounce from the SBI spread could work, but position size should be very small — less than 2 percent of capital. For long-term investors, wait for either a price correction toward Rs 340-350 or a clear improvement in earnings momentum before buying. In short, this is a hold for existing owners, but not a fresh buy at today's price.

The full AI analysis, bull and bear case and key monitorables are in FairStock Pro.

Data from BSE/NSE filings. AI analysis is for educational purposes only — not investment advice. Scoring methodology · Disclaimer