Kotak Mahindra Bank Q2 results preview: NII and net profit to see muted growth; check details

Private lender Kotak Mahindra Bank Ltd will announce its quarterly financial results for the July-September period on Saturday, October 19.

Investors will focus on asset quality numbers, net interest income growth and margins, and the unsecured loan portfolio. Management commentary on deposit growth and credit growth will also be key metrics for investors.

Kotak Bank may see muted NII and net profit growth

Kotak Mahindra Bank is expected to report muted growth in net interest income (NII) and net profit during the September quarter. NII is expected to be in the range of ₹6850 to ₹7150 crore, which is a rise of 10 – 12% on a yearly basis but flat compared to the previous quarter.

Standalone net profit is expected to grow over 10% YoY to ₹3,375 to ₹3,560 crore, but profitability will sharply fall compared to the previous quarter's net profit of ₹6,250 crore. According to experts, higher operating expenses and lower other income is likely to weigh on the bottom line.

In the previous quarter, Kotak Mahindra Bank had seen a big boost of ₹3,013 crore in consolidated profit after tax due to the divestment of a stake in Kotak General Insurance to Zurich Insurance Group.

Meanwhile, net interest margins (NIM) are also expected to decline by 3 to 10 basis points quarter over quarter. In the June quarter, Kotak Mahindra Bank’s NIM stood at 5.02% declining from 5.57% in a year ago period.

Kotak Mahindra Bank Q1FY25 performance

The private lender reported a consolidated PAT of ₹7,448 crore for the June quarter of FY25, up 79% YoY from ₹4,150 crore in Q1FY24. Consolidated PAT for Q1FY25, excluding gains (net of tax) of ₹3,013 crore (on the divestment of stake in Kotak General Insurance), stood at ₹4,435 crore.

Its interest income rose by 10% to ₹6,842 crore in the June quarter against ₹6,234 crore in the year-ago period.

Key things to watch out for

During the second quarter result, investors will closely monitor the loan book growth, which is expected to see double-digit rise on a yearly basis. Overall, asset quality is also expected to improve. However, management commentary on the growth outlook, margins and rising unsecured loan book will be in focus.