- Kotak Mahindra Bank's advances grew 25% YoY and 13% QoQ in Q2 FY27, aided by specific portfolios
- Core advances rose 19% YoY and 8% QoQ, showing sustained business momentum
- Gross NPA declined 14bps QoQ to 1.04%, and NNPA improved 3bps to 0.24% in Q2 FY27
Kotak Mahindra Bank reported strong advances growth of 25% YoY and 13% QoQ in Q2 FY27, partly aided by FCNR(B)-linked advances (Rs 16,110 crore) and the transfer of the Kotak Mahindra Investments loan book (Rs 9,600 crore). Excluding these factors, core advances grew a healthy 19% YoY and 8% QoQ, indicating sustained underlying business momentum. Asset quality remained strong, with gross non-performing asset declining 14bps QoQ to 1.04% and NNPA improving 3bps to 0.24% in Q2 FY27.
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Nirmal Bang Report
Following Kotak Mahindra Bank Ltd.'s steady Q2 performance, Nirmal Bang has maintained its Buy rating on the stock, valuing the standalone bank at 2.0 times Sep-28E adjsuted book value and adding Rs 152/share for subsidiaries to derive a target price of Rs 510 vs Rs 475, earlier, implying a potential upside of 18% from the reports current price.
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Nirmal Bang expects healthy loan growth, recovery in net interest margins, steady fee income, benign asset quality and continued cost discipline to support a sustainable ~2% RoA trajectory.
Kotak Mahindra Bank Q2 Results Highlights
- Kotak Mahindra Bank reported Q2 FY27 net profit of Rs 4,210 crore, up 29% YoY / 2% QoQ, in line with brokerage's estimates.
- Net interers margin declined 22 bp QoQ to 4.31%, while underlying core margins remained broadly stable, excluding the FCNR(B) impact and quarterly day-count variations.
- Loan growth remained strong at 25% YoY / 13% QoQ. Excluding FCNR(B)-linked advances and the transferred Kotak Mahindar Investments Ltd. portfolio, growth stood at 19% YoY / 8% QoQ, with broad-based traction across SME, corporate and retail banking.
- Cost-to-assets improved to 2.40% from 2.66% in Q1 FY27, extending the improvement seen over the preceding six quarters.
- Operating expenses grew 14% YoY / 3% QoQ; excluding one-off costs relating to international-branch borrowings, growth was disciplined at 11% YoY/ flat QoQ.
- Fee income remained robust, growing 21% YoY / 17% QoQ, including Rs 158 crore from FCNR(B)-linked advances.
- Asset quality remained benign, with sequential improvement in credit costs, slippages and NPA ratios, while unsecured credit costs and delinquencies continued to improve.
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