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“Leadership overhang easing for private banks; rate sensitivity remains favourable”

ICICIdirect Research 01 Oct 2026 DISCLAIMER

Private banks are entering a more favourable setup as leadership uncertainty starts to ease. Kotak Mahindra Bank has received RBI approval for Anup Kumar Saha as its next MD & CEO for three years from January 1, 2027, removing a key near-term overhang. Saha, currently Executive Director overseeing retail banking, government business, data analytics and marketing, brings extensive experience across consumer-finance, MSME and digital execution from his 8 years tenure at Bajaj Finance. His internal transition should limit execution disruption and provide continuity at Kotak, while his background is particularly relevant as bank looks to accelerate retail growth, digital execution, customer acquisition and operating leverage.
At current valuations, Kotak looks attractive, with advances expected to grow ~15–17% for FY27E, favourable FCNR(B) inflows supporting deposit growth, margins to largely sustain and asset quality remaining benign. The stock is trading near historical lows at ~1.7x FY28E BV; so factoring all, we value the standalone bank at ~2.1x FY28E BV with a target price of ₹475 (BUY rating).
Attention now shifts to HDFC Bank, which has submitted two CEO candidates to RBI; media reports have cited Kaizad Bharucha and Anup Bagchi among potential contenders.  With leadership overhang gradually clearing, the setup for private banks is improving.
A potential RBI rate hike could provide an additional earnings tailwind given ~55–60% EBLR-linked advances, enabling faster asset repricing, while the recent bond-yield run-up (+40 bps QoQ to 7.15%) should have a relatively moderate treasury impact given smaller investment-book vs PSBs.

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