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Informist, Thursday, Jul. 16, 2026

 

By Diksha Tripathy

 

MUMBAI - Kotak Mahindra Bank Ltd. is set to report healthy on-year growth in net profit for the June quarter on the back of robust loan growth, increased treasury income, and lower operational expenses, according to brokerages tracking the bank. However, a rise in provisions from a quarter ago is likely to cap profit growth of the bank on a sequential basis.

 

The private-sector lender is estimated to post a net profit of INR 40.49 billion for the June quarter, up over 23% on year, according to an average of estimates from 13 brokerages. The highest estimate for net profit is INR 54.58 billion from PhillipCapital (India) Pvt. Ltd. and the lowest estimate is INR 34.54 billion from Prabhudas Lilladher Pvt. Ltd. For the March quarter, the bank had reported a net profit of INR 40.27 billion, up 13% on year.

 

The expectations of growth in net profit were directly linked to the provisional numbers shared by the bank, which showed robust loan growth for the June quarter. Net advances of Kotak Mahindra Bank rose over 15% on year to INR 5.12 trillion as on Jun. 30, the provisional data showed. While most brokerages expect a similar 15% on-year growth in advances, Nuvama Wealth Management Ltd. expects over 17% on-year loan growth for the June quarter.

 

Deposits are also expected to witness healthy growth for the June quarter, brokerages said. Total deposits grew nearly 12% on year to INR 5.73 trillion as on Jun. 30, provisional data showed. Of the total deposits, the private-sector bank's current account savings account deposit rose over 10% on year to INR 2.31 trillion, the bank said.

 

Net interest income of Kotak Mahindra Bank is estimated to rise nearly 11% on year and nearly 2% on quarter to INR 80.22 billion for the June quarter. The highest estimate for net interest income is INR 82 billion from JM Financial Institutional Securities Pvt. Ltd. and the lowest estimate is INR 78.20 billion from Dolat Capital Market Pvt. Ltd. For the March quarter, the bank had posted a net interest income of INR 78.76 billion, up nearly 8% on year.

 

"NII (net interest income) growth will be in-line with average loan growth as the rise in yield on advances to be in tandem with rise in cost of deposits," YES Securities (India) Ltd. said. 

 

For the June quarter, most brokerages expect the bank's overall net interest margin to decline by at least 6 basis points. However, Systematix Shares and Stocks (India) Ltd. expects the net interest margin to remain stable on quarter. 

 

In terms of asset quality, the slippages and provisions of the bank are expected to increase on a sequential basis in the reporting quarter due to early impact from supply chain disruptions arising from the war in West Asia and slow recovery in nominal GDP growth, the brokerages said. For the first quarter, brokerages expect a marginal uptick in the bank's credit cost.

 

The bank's provisions and contingencies were down over 43% on year and 36% on quarter at INR 5.16 billion in the March quarter. It had recognised fresh slippages worth INR 10.18 billion in Jan-Mar, down from INR 14.88 billion a year ago.

 

For the first quarter, the growth in fee income is expected to be lower due to seasonality. However, the treasury income of the bank is expected to inch up on the back of falling yields. 

 

Total operating expenses are expected to be lower on quarter, driven by lower other operational expenditure. Some brokerages said operational growth would be lower than business growth of the bank.

 

Commentary on asset quality, margins, and growth outlook of the bank will be closely watched in the June quarter earnings of Kotak Mahindra Bank, brokerages said.

 

The private-sector lender's commentary on foreign currency non-resident (bank) deposits and external commercial borrowings will also be tracked by market participants. In June, the Reserve Bank of India opened a concessional swap window for banks to park funds raised from their three- to five-year FCNR (B) deposits at no hedging cost, with the scheme in effect till Sept. 30. Following the RBI's move, Kotak Mahindra Bank had raised its interest rates on FCNR (B) deposits for tenures ranging from three to five years by up to 315 basis points to 6.00-6.15%.

 

CEO TRANSITION

Ashok Vaswani, managing director and chief executive officer of Kotak Mahindra Bank, had in June informed the board that he does not seek reappointment upon completion of his term on Dec. 31. The board had acknowledged Vaswani's decision and initiated the process of finding a successor. However, the bank has not given any details on the matter since Vaswani's decision. The management commentary on the appointment will be closely tracked, brokerages said.

 

Market participants will also track commentary on recent acquisitions by the bank. In May, Kotak Mahindra Bank received the RBI nod to acquire 9.99?ch in AU Small Finance Bank Ltd., Federal Bank Ltd., Jammu & Kashmir Bank Ltd., City Union Bank Ltd., and South Indian Bank Ltd.    

Kotak Mahindra Bank is scheduled to disclose its earnings for the June quarter Saturday. Thursday, shares of the bank closed marginally down at INR 377.15 apiece on the National Stock Exchange. The stock has risen nearly 2% since its March quarter earnings were announced on May 2. 

 

Of the 19 brokerage reports on the bank available with Informist, 18 have a "buy" recommendation on the stock with an average target price of INR 697 per share. This is over 84% higher than the current market price. One brokerage has a "hold" recommendation with a target price of INR 430 per share.

 

Following are the Apr-Jun earnings estimates, in INR billion, for Kotak Mahindra Bank from 13 brokerages, in descending order by the net profit estimate:

Brokerage	Net Interest Income	Net Profit
PhillipCapital (India) Pvt. Ltd.	81.07	54.58
JM Financial Institutional Securities Pvt. Ltd.	82.00	42.20
Elara Securities (India) Pvt. Ltd.	80.17	41.57
Anand Rathi Share and Stock Brokers Ltd.	79.64	41.54
Systematix Shares and Stocks (India) Ltd.	79.33	40.25
Dolat Capital Market Pvt. Ltd.	78.20	39.80
Nirmal Bang Equities Pvt. Ltd.	80.21	39.34
Motilal Oswal Financial Services Ltd.	79.94	39.21
Nomura Financial Advisory and Securities (India) Pvt. Ltd.	80.70	39.20
YES Securities (India) Ltd.	80.72	38.96
Bank of America Global Research	81.22	38.22
Nuvama Wealth Management Ltd.	79.74	36.99
Prabhudas Lilladher Pvt. Ltd.	79.92	34.54

 

End

 

IST, or Indian Standard Time, is five-and-a-half hours ahead of GMT

 

Edited by Deepshikha Bhardwaj

 

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