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ICICI Direct Report
Kotak Mahindra Bank Ltd. reported robust performance with further improvement in asset quality.
Advances up 17.9% YoY to Rs 3.2 lakh crore, deposits up 16.5% YoY. Net interest income growth at 35% YoY, net interest margins expand 28 basis points QoQ to 5.75%.
Kotak Mahindra Bank's credit cost at 24 bps. Profit after tax grew 26.3% YoY, 25.2% QoQ at Rs 3495 crore. Gross non performing asset declined 12 bps QoQ to 1.8%; net slippages at 0.3% of advances.
Key triggers for future price performance:
Kotak Mahindra's management is confident of better than industry growth and have required resources to fund the growth.
Healthy demand in unsecured segment to drive growth as well as margins. Expect strong return on asset of 2.4% and gradual improvement in return on equity.
Continued investment in tech and branch expansion may elevate opex in the near term, though benefit to accrue subsequently.
Gradual improvement in contribution of subsidiaries to aid valuation of consolidated entity.
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