Kotak Mahindra Bank’s standalone profit rose 29.48% in the September quarter, while its net interest margin slipped to 4.31%, putting earnings growth alongside pressure on a key lending measure.
Profit totaled Rs 4,211.97 crore, up 2.16% from the June quarter. The board approved the unaudited standalone and consolidated results on Oct. 24.
Net interest income climbed 15.71% year over year to Rs 8,458.97 crore. The margin was 22 basis points below June and 23 basis points lower than a year earlier. Kotak attributed most of the moderation to FCNR(B) deposit mobilization.
Net advances stood at Rs 577,295 crore as of Sept. 30, up 25% from a year earlier. Growth was 19% after excluding loans against FCNR(B) deposits and the portfolio transferred from Kotak Mahindra Investments. During the quarter, the bank mobilized about Rs 55,344 crore in FCNR(B) deposits and extended about Rs 16,110 crore in loans through its international branches.
Fees and services income rose 21% year over year to Rs 2,926 crore. Operating expenses increased 14% year over year to Rs 5,271 crore, while cost to assets fell to 2.40% from 2.66% in June. Gross nonperforming assets were 1.04% of advances and net nonperforming assets were 0.24%; both ratios declined from the prior quarter, by 14 and three basis points, respectively.
NDTV Profit reported that Nirmal Bang kept its Buy rating and raised its target price to Rs 510 from Rs 475. Its account of the brokerage’s research said the valuation used a 2x multiple of estimated September 2028 adjusted book value for the standalone bank and included Rs 152 per share for subsidiaries. NDTV Profit also reported that the brokerage projected return on assets of about 2%, based on expected loan expansion and margin improvement, fee income, asset quality and cost control.
