The decline occurred post the resignation of KVS Manian, Joint MD, from his 29-year role at the bank and its board.
Kotak Mahindra Bank shares plunged 4.38% to a new 52-week low of Rs 1,552.55 each on Thursday, following Joint MD KVS Manian’s resignation from his 29-year tenure on the bank’s board, despite his recent promotion.
Analysts Warn of Senior Exits’ Impact on Kotak Mahindra Bank’s Performance and Regulatory Concerns:
“Nuvama Institutional Equities stated in a note that the departure of a longstanding Key Management Personnel (KMP) is detrimental, especially given the recent exits of several KMPs over the past year and in light of the RBI’s recent prohibition on Kotak.”
Analysts noted that following the recent CEO appointment, there has been a significant increase in senior exits within a compressed six-month period, alongside an attrition rate exceeding industry norms. Furthermore, the RBI’s digital ban has highlighted shortcomings in the bank’s previously emphasized digital capabilities.
Taking these factors into account, Nuvama analysts have lowered their stock rating to ‘Reduce,’ setting a target price of Rs 1,530. They anticipate that the recent alterations will impact growth and profitability for a minimum of 12–18 months.
Analysts Warn of Potential Regulatory Impact Amid Senior Departures, While Market Reacts to Kotak Mahindra Bank’s Share Price Movement:
Meanwhile, Jefferies advised vigilance for additional departures, as these departures could result in the extension of RBI’s constraints on issuing new credit cards and enrolling new online customers.
While upholding a ‘Hold’ recommendation with a target price of Rs 1,970, analysts caution that senior-level departures could impact the bank’s growth and valuations.
Kotak Mahindra Bank’s market capitalization stands at over Rs 3.10 lakh crore, as per BSE records. At 10:29 AM, the bank’s shares were trading 3.81% lower at Rs 1,561.95 each. In comparison, the Sensex was up 0.30% at 74,708.79 levels.
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