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Prabhudas Lilladher Report
Kotak Mahindra Bank Ltd. saw a strong quarter as profit after tax at Rs 35 billion beat our estimate by 26%, largely led by lower opex due to change in pension annuity rates and QoQ normalisation of one-time promotional expenses.
While loan growth was a miss at 18% YoY (our estimate 21%), net interest marin was a beat 5.86% (our estimate 5.58%) as sequential credit flow (2.9%) was mainly in favor of higher yielding non-housing retail (up 7.6%).
Traction continues in superior margin segments and bank is on course to achieve its guidance (unsecured share to mid-teens in FY24E) as mix of personal loan/credit card/micro finance institution has consistently risen over FY22 to FY23 from 6.8% to 9.9%.
Share of granular deposits (less than Rs 50 million) in quarterly flow was better. We remain optimistic on Kotak Mahindra Bank as balance sheet construct is improving, which would cushion margins.
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