Shares of Kotak Mahindra Bank will be in focus today, July 20 after the lender declared earnings for the April to June quarter for the fiscal 2027. The bank's net profit rose 26% year-on-year to Rs 4,123 crore from Rs 3,282 crore, beating Bloomberg estimate of Rs 3,975 crore.
Net interest income, the difference between interest earned and interest paid, rose 9.2% year-on-year to Rs 7,928 crore from Rs 7,260 crore. Operating profit rose 10.2% to Rs 6,131 crore, against Rs 5,564 crore in the corresponding quarter of the previous year. The bank's asset quality remained primarily stable in the quarter under review. Gross non-performing assets improved to 1.18% of total advances from 1.20% in the preceding quarter, matching analysts' expectations.
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Brokerages remained mixed on Kotak Mahindra Bank's Q1 show, indicating lagging growth and steady asset quality. CIti maintained 'Buy' call on the stock, cutting target price to Rs 465 from its previous target of Rs 485. Latest target marks an upside of 19.2% from Kotak Mahindra Bank shares closing price of Rs 389.95. The brokerage highlighted weaker NII, margin pressure, and softer deposit growth despite stable asset quality and controlled costs.
Meanwhile, Bernstein retained 'Market-Perform' coverage with a target price of Rs 500, a 28.2% upside. The brokerage emphasised on healthy loan growth and stable asset quality, while flagging weaker deposits, lower NIM, and subdued RoE.
Citi on Kotak Mahindra Bank
- Maintain Buy; Cut TP to Rs 465 from Rs 485
- NIMs Contracted, NII Miss, Growth Lags
- Credit Cost/Opex Contained
- Credit Cost Normalizes in a Seasonally Soft Quarter
- SME, Corporate, and MFI Anchor Growth; Secured Retail Remains Sluggish
- Deposit Momentum and CASA Ratio Soften
Bernstein on Kotak Mahindra Bank
- Maintains MARKET-PERFORM | TP Rs. 500
- Loan growth remained broad-based at 15% YoY, led by corporate, SME and retail segments.
- Deposit growth lagged at 12% YoY, with moderation in low-cost balances
- NIM declined 14 bps QoQ due to lower loan yields.
- Asset quality remained stable
- Credit costs increased modestly, reflecting rise in fresh slippages
- Cost discipline supported profitability. Lower credit costs driving earnings growth.
- RoE remained below large private peers. Elevated capital buffers continuing to weigh on profitability.
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