Kotak Mahindra Bank Q3 earnings preview: Net profit likely to rise in double digits asset quality may improve

Private sector lender Kotak Mahindra Bank Ltd will report its earnings for the quarter ended December 2023 today. Axis Securities expects Kotak Bank to report an 18% rise in Q3 profit to Rs 3,294 crore against Rs 2792 crore in the Q3 of previous fiscal. NII is seen rising 14% to Rs 6447 crore in the last quarter against Rs 5653 crore in the December quarter of the previous fiscal.  

The brokerage expects business growth momentum to sustain adding that growth in the unsecured portfolio will be watched out. Margin contraction is likely to continue, said Axis Securities adding that NIMs will fall by 10-15bps.  

Axis Securities cited two key monitorables during the Q3 earnings which are commentary on NIMs and growth outlook, especially the growth trajectory hereon in the unsecured book.  

Prabhudas Lilladher sees NII rising 11.5% to Rs 6301.9 crore in Q3 against   Rs 5652.9 crore in the corresponding quarter of the previous fiscal.  

Net profit is expected to climb 13% to Rs 3156.1 crore in the December quarter, said Prabhudas Lilladher adding that loan growth is seen strong on a quarter on quarter basis, rising 5%.  

“However, margins could fall sharply by 26bps QoQ to 5.09% due to higher EBLR linked portfolio. As a result, earnings could fall by 1.1% QoQ. Asset quality is expected to improve with gross non-performing assets (GNPAs) decreasing by 3bps QoQ,” said Prabhudas Lilladher in an earnings preview note.  

The lender is likely to report a marginal 5.5% rise in Q3 net profit to Rs 3,367.4 crore, said YES Securities in its Q3 earnings preview. Net interest income (NII) will likely rise 16.5% to Rs 6587 crore in the December 2023 quarter. 

“NIM will be stable sequentially. Sequential fee income growth will slightly exceed loan growth due to linkage with payments activity. Opex growth will slightly lag loan growth. Slippages would be broadly stable on sequential basis. Provisions will be broadly stable sequentially due to idiosyncratic aspects,” said the brokerage.  

In Q2 of the current fiscal, the lender reported a 24 per cent year-on-year (y-o-y) rise standalone net profit to Rs 3,191 crore on healthy growth in net interest income and other income. It reported a net profit of Rs 2,581 crore in the year-ago quarter. 

Net interest income in the September 2023 quarter climbed 23 per cent y-o-y at Rs 6,297 crore against Rs 5,099 crore in the year-ago quarter. 

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