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Informist, Thursday, Apr. 30, 2026

By Kabir Sharma

MUMBAI – Kotak Mahindra Bank is expected to report a largely stable net profit for the March quarter, with brokerages estimating moderate loan growth, some pressure on margins due to rate-cut transmission, and support to profitability from easing credit costs and controlled operating expenses.

An average of estimates from 10 brokerages suggests the bank will report a net profit of INR 36.44 billion for the quarter, up just 3% on year. The estimates for net profit range between INR 33.9 billion and INR 37.7 billion, with Anand Rathi Share and Stock Brokers Ltd. giving the lowest estimate and YES Securities (India) Ltd. giving the highest. The bank's net interest income is estimated at INR 77.97 billion, up 7% on year, according to the average of estimates. The highest estimate for net interest income is INR 79.10 billion from Prabhudas Lilladher Pvt. Ltd. The lowest estimate is INR 77.23 billion by JM Financial Institutional Securities Pvt. Ltd.

For the December quarter, Kotak Mahindra Bank had reported a net profit of INR 34.46 billion and total income of INR 167.41 billion. The bank's net interest income--the difference between interest earned and expended--for the quarter was INR 75.65 billion, up 3% sequentially and 5% on year.

The brokerages broadly expect loan growth to remain in the 3–4% range sequentially, reflecting a cautious expansion strategy. According to YES Securities, "sequential loan growth will be in the 4% ballpark due to idiosyncratic growth trajectory." The brokerage added that the bank's growth profile may lag some peers in the near term. Similarly, Motilal Oswal Financial Services Ltd. expects the bank's advances to grow 3.7% on quarter, led by the corporate and secured retail segments, while highlighting "slower growth in unsecured segment".

Prabhudas Lilladher has a similar view, estimating loan growth at 3.2% on quarter, but remained constructive on the medium-term outlook, saying the bank "remains well positioned to sustain healthy double digit credit growth over the medium term, anchored by SME (small and medium enterprises), secured retail and pick-up in unsecured (lending) as stress is easing".

Kotak Mahindra Bank's net advances rose 16.2% on year to INR 4.96 trillion as of Mar. 31, according to provisional figures released by the bank earlier this month. Sequentially, the net advances were up 3.2% from INR 4.81 trillion as of Dec. 31.

The bank's deposit growth is expected to be slightly stronger, with Motilal Oswal estimating a 4% sequential increase. Nomura Equity Research noted that "deposit growth has been strong", which could support the stability of the private-sector lender's balance sheet but may also weigh on margins, given the cost dynamics.

The bank's total deposits were INR 5.73 trillion as of Mar. 31, up 14.7% on year and 5.5% on quarter. Current account savings account deposits rose 15.5% on year to INR 2.48 trillion, as per the provisional data. Sequentially, the bank's current account savings account deposits were up 10.5%.

The lender's margins are expected to have suffered mild compression during the quarter, with most brokerages forecasting a decline of 6–9 basis points sequentially. Nomura said, "NIMs (net interest margin) to decline 9bp q-q (quarter on quarter) due to transmission of repo (rate) cut, higher growth in secured retail partly offset by term deposit re-pricing and CRR (cash reserve ratio) cut." Motilal Oswal also expects some margin pressure. The brokerage stated, "Expect NIMs to contract by 6bp QoQ (quarter-on-quarter) amid repo repricing and growth in secured business."

YES Securities has a relatively more optimistic take, noting that "NII (net interest income) growth will be higher than average loan growth due to rise in yield on advances outpacing cost of deposits". Consequently, it expects the net interest margin to be slightly higher sequentially. While the repo rate cuts of 100 bps in FY26 are expected to lower yields, a higher share of secured lending--which typically offers lower yields--could further compress spreads. However, repricing of term deposits and potential benefits from cash reserve ratio cuts may offer partial relief, brokerages said.

The lender's net interest margin contracted to 4.54% in the December quarter from 4.93% in the year-ago quarter, primarily because the Reserve Bank of India cut the repo rate by 125 basis points in 2025. Sequentially, the net interest margin was flat.

On the revenue front, fee income is expected to provide a meaningful cushion. YES Securities said, "Sequential fee income growth will be higher than loan growth," indicating continued traction in non-interest income streams. This, coupled with a stable net interest income, is likely to support the bank's overall operating income growth.

Operating expenses are expected to have been contained, aiding operating leverage. YES Securities noted that "opex (operating expenses) growth would be lower than business growth" while Motilal Oswal expects "opex growth to be slightly ahead of loan growth". The lender's total expenses during the December quarter had risen nearly 4% on year to INR 113.61 billion.

Asset quality is likely to remain broadly stable, with some brokerages pointing to marginal improvements. Nomura said "slippages to decline; credit costs to moderate". YES Securities also expects "slippages would be lower on sequential basis due to seasonality". Motilal Oswal highlighted a mixed trend, noting that credit cost will be "maintained amid retail CV (commercial vehicle loans) stress, offset by lower slippages from MFI (microfinance) and CC (credit cards)". In December, the bank's slippages were at INR 16.05 billion, down from INR 16.57 billion in the year-ago quarter.

Prabhudas Lilladher has flagged slight deterioration in headline asset quality metrics, stating that "asset quality may worsen with GNPAs (gross non-performing assets ratio) increasing by 1bps QoQ at 1.31%", but adding that "credit costs to decrease by 6bps QoQ". This suggests that while some pockets of stress persist, the overall provisioning requirements for Kotak Mahindra Bank are likely to ease.

In December, the lender's asset quality had improved with the gross non-performing asset ratio falling to 1.30% as on Dec. 31 from 1.39% as on Sept. 30. The net non-performing asset ratio was 0.31% as on Dec. 31, nearly flat on quarter and down from 0.41% at the end of December 2024.

Lower provisions are expected to be a key driver of profitability in the March quarter. YES Securities expects provisions to be lower on a sequential basis. Prabhudas Lilladher also expects profit growth to be supported by a decrease in provisions. The moderation in credit costs is seen offsetting the impact of margin compression, thereby supporting a rise in the bottom line. Provisions for the December quarter were INR 8.10 billion, up 2% on year.

Kotak Mahindra bank is scheduled to declare its earnings Saturday. The management's commentary on asset quality and the outlook for margins will be key factors to watch out for, brokerages said.

Of the 17 brokerage reports on the bank available with Informist, 13 have a "buy" recommendation on the stock with an average target price of INR 820 per share. This is more than double the current share price. Two brokerages have a "hold" recommendation with an average target price of INR 438 per share. The remaining two say "sell" with an average target price of INR 423 per share. Thursday, shares of Kotak Mahindra bank ended slightly higher at INR 383.30 on the National Stock Exchange.

Following are the March quarter earnings estimates, in INR billion, for Kotak Mahindra Bank from 10 brokerages in descending order of the net profit estimate:

End

Edited by Rajeev Pai

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