Kotak Mahindra Bank shares down 3% despite 81% YoY jump in Q1 net profit

The bank reported a 6% YoY uptick in its operating profit to ₹5,254 crore. Meanwhile, the provisions and contingencies during the quarter grew 58% YoY to ₹578 crore.

Kotak Mahindra’s asset quality during Q1 saw an improvement as the gross non-performing assets (GNPA) came down to 1.39% from 1.77% in the corresponding period last year while the net non-performing assets (NNPA) stood at 0.35% compared to 0.40% in the previous year. The provisioning coverage ratio (PCR) came in at 75% compared to 78% last year.

The bank saw significant growth in its net profit during the quarter due to gains of ₹2,730 crore earned from divestment in Kotak General Insurance. Zurich Insurance Group acquired a 70% stake in Kotak General Insurance. Kotak Mahindra will hold 30% of the company's stake and act as a corporate agent for the distribution of general insurance products. However, excluding the gains from the divestment results in only a 2% YoY rise in the bank’s net profit.

In Q1FY25, Kotak Mahindra’s deposits grew by 21% YoY to ₹4,35,603 crore. Current account deposits grew 5% YoY to ₹59,431 crore, while average savings account deposits grew 2% YoY to ₹1,22,105 crore. The bank’s current and savings account (CASA) ratio at the end of the first quarter stood at 43.4%.

Shares of the company have declined by nearly 7% since the beginning of the year. The stock has lost over 6% in the past year.