Shares of Kotak Mahindra Bank were down nearly 3% on Thursday. The shares hit a 52 week low of Rs 1,552.55 apiece, on Thursday after its Joint Managing Director KVS Manian resigned from the role and the board. Manian who was with the bank for 29 years was recently promoted to the role of Joint MD.
As per Analysts, there has been a notable surge in senior departures within a condensed six-month timeframe amid the appointment of new CEO. This is also coupled with an attrition rate that surpassed industry standards. Along with this, the RBI's digital ban has also underscored deficiencies in the digital capabilities that the bank previously depicted as a core competency.
In the wake of all these events, analysts at Nuvama have downgraded the stock to ‘Reduce,’ with a target price of Rs 1,530.
“Losing a long standing KMP is a negative amid many KMP exits in the last one year and on the back of RBI’s recent ban on Kotak,” said Nuvama Institutional Equities in a note. “We believe the recent changes shall hurt growth and profit at least for 12–18 months,” they added.
Jefferies has also warned to watch out for more exits as these exits may lead to extension of RBI’s restrictions on issuing fresh credit cards and onboarding new customers online. Jefferies has maintained 'Hold' for a target price of Rs 1,970, however, has suggested that senior level exits can affect growth and valuations of the bank.
As per BSE, the market capitalisation of Kotak Mahindra Bank is over Rs 3.10 lakh crore.
Also watch: Kotak Mahindra Bank shares plunge 10% in early trade amid RBI's restriction