Nomura upgrades Kotak Mahindra Bank, calls ICICI Bank preferred compounder. Here's why

Indian banks are currently facing pressure from tightening liquidity and rising funding costs, which could impact Net Interest Margins (NIMs). Analyst upgrades for specific banks like Kotak and ICICI suggest they are seen as resilient or better positioned within this challenging environment.

• •Nomura upgraded Kotak Mahindra Bank to 'Buy' and designated it as its top pick among Indian banks.
• •Nomura retained ICICI Bank as its 'preferred compounder'.
• •The upgrades come amidst tightening liquidity, rising funding costs, and delayed NIM recovery across the banking sector.
• •Kotak shares rose ~2% and ICICI shares rose ~1.5% following the news.
• •Price targets are Rs 445 for Kotak Mahindra Bank and Rs 1,535 for ICICI Bank.