Diwali Muhurat Trading 2026 Stock Picks: As investors look for stock market opportunities ahead of Diwali Muhurat trading 2026, private sector banking stocks are among the segments attracting attention. Pankaj Pandey, Head of Research at ICICI Securities, has recommended Kotak Mahindra Bank as one of his preferred stock picks for Diwali, citing its growth and improving net interest margin (NIM) outlook.
In an exclusive chat with ET Now Swadesh, Pankaj has said both HDFC Bank and Kotak Mahindra Bank look attractive after facing leadership transition-related challenges. However, he believes Kotak Mahindra Bank could deliver better financial numbers compared to HDFC Bank.
Kotak Mahindra Bank vs HDFC Bank: Why Pankaj prefers Kotak?
Explaining his preference for Kotak Mahindra Bank, Pankaj said both private sector lenders have faced leadership transition issues, but Kotak’s growth outlook appears stronger.
“One is HDFC Bank and the other is Kotak. Both had leadership transition issues. Overall, we feel that compared to HDFC Bank, Kotak Bank’s numbers should be better,” he said.
Comparing their latest advances in growth, he pointed out that HDFC Bank reported 14 per cent growth, excluding FCNR, while Kotak Mahindra Bank’s numbers were encouraging.
He also highlighted that Kotak Mahindra Bank is the fourth-largest private sector bank in India, with a diversified loan portfolio.
“It is a pan-variable diversified book. It has 39 per cent retail and 24 per cent corporate,” Pankaj said.
Kotak Bank NIM outlook: Why margins could improve
Another factor supporting his positive outlook on Kotak Mahindra Bank is its loan book composition. Pankaj pointed out that around 60 per cent of the bank’s loan book is linked to the repo rate.
He added that the bank’s net interest margin (NIM), currently around 4.3 per cent, may have bottomed out.
“We feel that its 4.3 per cent margin has bottomed out,” he said.
An improvement in margins, along with stronger credit growth, could support the bank’s earnings outlook.
Kotak Mahindra Bank growth outlook: 20-22 per cent growth expected
Pankaj expects Kotak Mahindra Bank to deliver stronger growth than the overall banking industry.
According to him, the banking sector could witness growth of around 14-15 per cent, while Kotak Mahindra Bank has the potential to grow at 20-22 per cent.
“We are thinking of 14-15 per cent growth in the banking industry. If the FCNR buffer is removed, then there will be a 14-15 per cent growth. We feel that this bank can grow 20-22 per cent,” he said.
He also highlighted the bank’s return on assets (ROA), which stands at around 2 per cent, as another positive factor supporting his investment outlook.
Kotak Mahindra Bank share price target
Pankaj has assigned a target price of Rs 540 to Kotak Mahindra Bank, indicating an upside potential of around 18 per cent.