Earnings Outlook
Kotak Mahindra Bank Jan-Mar PAT seen down 14% YoY on higher provisions
This story was originally published at 14:09 IST on 29 April 2025
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By Kshipra Petkar
MUMBAI – Kotak Mahindra Bank Ltd.'s net profit for the quarter ended March is seen falling on year due to a sharp rise in provisions, analysts said. According to the average of estimates of 15 brokerages, the net profit of India's fourth largest private sector bank is expected to fall 14% on year to INR 35.66 billion in Jan-Mar. Sequentially, it is seen 8% higher. Estimates for the net profit in Jan-Mar were in the range of INR 32.80 billion and INR 38.73 billion.
Kotak Mahindra Bank will announce its results on Saturday. At 1315 IST, shares of the lender were down 0.2% at INR 2,220.90 on the National Stock Exchange.
According to Nomura Equity Research and IIFL Capital Services, Kotak Mahindra Bank's provisions are seen tripling in Jan-Mar from INR 2.64 billion in the same quarter a year ago. In Oct-Dec, the bank's provisions stood at INR 7.94 billion with slippages seen "slightly higher" sequentially, according to YES Securities. Kotak Mahindra Bank's fresh slippages were to the tune of INR 16.57 billion in Oct-Dec and INR 13.05 billion in the corresponding quarter a year ago.
Analysts expect credit cost to be slightly higher, in the range of 0.75-0.9%, compared to 0.68% in Oct-Dec, with the microfinance and unsecured portfolios keenly eyed.
On the income side, the net interest income of Kotak Mahindra Bank is seen rising 7.3% on year and 3% on quarter to INR 74.11 billion in Jan-Mar, according to the average of brokerages' estimates. The estimates for net interest income were in the range of INR 72.14 billion and INR 75.60 billion. Loan growth as at the end of March is broadly seen around the 15% mark.
"We increase our target multiple for Kotak Mahindra Bank due to superior loan growth and potential levers to cushion net NIM hit," ICICI Securities said in a pre-earnings report. The brokerage, which increased its target multiple to 2.6 from 2.3, has a 'buy' rating on the private bank with a target price of INR 2,450.
The lender's loan growth is also seen getting a push from its acquisition in January of Standard Chartered Bank's personal loan book worth INR 33.30 billion. This, according to Elara Securities, is expected to aid the net interest margin that stood at 4.93% in Oct-Dec, with the reduction in interest rates on savings accounts in February being another supportive factor.
In Jan-Mar, the Reserve Bank of India lifted restrictions on Kotak Mahindra Bank relating to the on-boarding of new customers through its online and mobile banking channels and issuance of new credit cards. "Lifting of RBI embargo could lead to better loan and deposit growth; bank also plans to increase share of unsecured loans from 10.5% to 15% which would cushion NIM (net interest margin)," Prabhudas Lilladher said.
Following are the Jan-Mar earnings estimates for Kotak Mahindra Bank based on reports from 15 brokerage firms in descending order of the estimate of net profit:
| Brokerages | Net interest income (INR million) | Net profit (INR million) |
| Nirmal Bang Equities Pvt Ltd | 73,588.00 | 38,732.00 |
| Motilal Oswal Financial Services Ltd | 74,588.00 | 37,800.00 |
| Anand Rathi Share and Stock Brokers Ltd | 74,917.00 | 37,064.00 |
| JM Financial Institutional Securities Pvt Ltd | 73,062.00 | 36,499.00 |
| Sharekhan Ltd | 73,930.00 | 36,280.00 |
| IIFL Capital Services Ltd | 73,500.00 | 36,200.00 |
| Prabhudas Lilladher Pvt Ltd | 75,103.00 | 36,109.00 |
| Nomura Equity Research | 75,600.00 | 36,000.00 |
| Emkay Global Financial Services Ltd | 74,833.00 | 35,769.00 |
| Dolat Capital Market Pvt Ltd | 72,896.00 | 34,750.00 |
| Elara Securities (India) Pvt Ltd | 75,000.00 | 34,574.00 |
| YES Securities (India) Ltd | 74,861.00 | 34,334.00 |
| PhillipCapital (India) Pvt Ltd | 72,135.00 | 34,313.00 |
| Ashika Stock Broking Ltd | 73,716.00 | 33,615.00 |
| ICICI Securities Ltd | 73,904.00 | 32,797.00 |
| AVERAGE | 74,108.87 | 35,655.73 |
End
IST, or Indian Standard Time, is five-and-a-half hours ahead of GMT
Edited by Tanima Banerjee
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