Kotak Mahindra Bank's Q1 net profit rose 26% to Rs 4,123 crore, beating estimates. But NIM slipped to 4.53% from 4.65% a year ago, and credit costs rose, signaling rate cycle pressure.
Alpha Score of 67 reflects moderate overall profile with strong momentum, strong value, moderate quality, moderate sentiment.
Kotak Mahindra Bank's Q1 standalone profit rose 26% to ₹4,123 crore, beating expectations, as net interest income grew 9.2% to ₹7,928 crore. Consolidated profit climbed 22.6% to ₹5,480 crore.
Net interest margin slipped to 4.53% from 4.65% a year earlier and 4.67% in the March quarter. "We have prioritised stability, profitability and efficiency without any compromise to our overarching strategy around the four focus customer segments," CEO Ashok Vaswani said. The bank scaled back growth in lower-return businesses and segments exposed to geopolitical risk, he added. It also took advantage of better spreads in corporate lending and volatility in treasury markets.
Deposits rose 14% to ₹5.72 lakh crore. Current account deposits, a key low-cost funding source, increased 15% to ₹78,107 crore. Advances climbed 15% to ₹5.27 lakh crore. Asset quality improved marginally, with gross NPAs at 1.18% versus 1.20% in the prior quarter.
Credit cost rose to 46 basis points from 39 bps, driven by the commercial vehicle and tractor finance portfolio. Fee income, a proxy for core business activity, increased 11% year on year but fell from the preceding quarter.
Kotak said its proposed purchase of Deutsche Bank's retail banking, private banking and wealth management operations in India fits its affluent and SME franchise. The bank expects the transaction to be return-on-equity accretive.
Vaswani said the bank would not compromise its strategy around four focus customer segments, even as it calibrated growth in the current environment.
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