Kotak Mahindra Bank Q2 net up 26% on higher income and better asset quality

Kotak Mahindra Bank reported a 26% year-on-year (YoY) increase in net profit to ₹5,645.38 crore for the quarter ended September, beating analysts’ estimates based on LSEG data but falling short of domestic brokerages’ projections of 27-32% growth.

The lender’s total income rose 18% YoY to ₹29,426.88 crore. Other income increased nearly 25% to ₹9,571.01 crore. However, sequentially, total income and other income declined 2.1% and 18.3%, respectively.

Net interest income (NII) grew 16% YoY to ₹8,459 crore. Net interest margin (NIM), however, contracted to 4.31% from 4.54% in the preceding quarter. The bank attributed the decline to deposits mobilised under the Reserve Bank of India’s special window for foreign currency non-resident bank (FCNR-B) accounts, through which it raised ₹55,344 crore.

Asset quality improved, with gross non-performing assets (GNPA) declining to 1.04% from 1.39% a year earlier. Net NPA fell to 0.24% from 0.32%. Provisions declined 15% YoY to ₹803 crore.

Operating expenses rose 14% YoY to ₹5,271 crore, partly offsetting the gains from higher income and lower provisions.

For the first half of FY27, net profit stood at ₹11,125.84 crore.

As of September 30, net advances grew 25% YoY to ₹5,77,295 crore, while deposits increased 23% to ₹6,51,491 crore.