Kotak Mahindra Bank Q1 Results Review - Weak Performance On Margin Decline, Higher Credit Costs: Systematix

NDTV Profit’s special research section collates quality and in-depth equity and economy research reports from across India’s top brokerages, asset managers and research agencies. These reports offer NDTV Profit’s subscribers an opportunity to expand their understanding of companies, sectors and the economy..Systematix Research Report.Kotak Mahindra Bank reported Q1 FY25 PAT of Rs 35.2 billion (ex one-off gains of Rs 27.3 billion from 70% stake sale in Kotak General Insurance) which increased by 2% QoQ (-14% YoY). Overall, earnings were lower than estimates due to margin decline QoQ along with higher credit costs..Other key highlights were:Gross Advances (net of IBPC/BRDS) growth of 3.7% QoQ, 19% YoY was led by corporate banking growth (net of IBPC/BRDS) of 8% QoQ, 12% YoY. Weak growth of 2% QoQ in unsecured credit (personal loan, business loan, consolidtaed durables credit cards, MFI),Deposit growth was flattish QoQ, +16% YoY as CASA declined by -5% QoQ (+3% YoY),Reported NIM (5.02%, -26 bps QoQ) declined sequentially due to higher funding costs QoQ due to CASA decline and lower assets yields on adverse mix.Other income declined by -1.7% QoQ (+9.2% YoY) due to seasonally lower fee income.Opex/assets also reduced to 3% (-8 bps / -16 bps QoQ/YoY), it is likely to remain around the current levels in the near to medium term as the bank plans to increase the branch opening frequency to 150-200 branches per year (168 / 80 new branches in FY24/FY23).Net slippage ratio increased to 0.81% versus 0.58% in Q4 FY24 and 0.63% in Q1 FY24 and reported credit costs increased to 55 bps versus 42 bps QoQ due to seasonality and stress in small ticket loans on overleveraging.Consolidated return on asset /return on equity of 2.3% / 13.12% (ex gains on stake sale in Kotak general insurance). .Kotak Mahindra Bank recorded gains (net of tax) on divestment of stake in Kotak General Insurance of Rs 30 billion on consolidated basis and Rs 27.3 billion on standalone basis..Click on the attachment to read the full report:.Kotak Mahindra Bank Q1 Results Review - Steady Quarter With Robust Growth Metrics: Dolat Capital.DISCLAIMERThis report is authored by an external party. NDTV Profit does not vouch for the accuracy of its contents nor is responsible for them in any way. The contents of this section do not constitute investment advice. For that you must always consult an expert based on your individual needs. The views expressed in the report are that of the author entity and do not represent the views of NDTV Profit..Users have no license to copy, modify, or distribute the content without permission of the Original Owner.

Kotak Mahindra Bank Q1 Results Review - Weak Performance On Margin Decline, Higher Credit Costs: Systematix

The brokerage assigns Rs 440 per share, post hold co discount, for its holding in the subsidiaries.

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Kotak Mahindra Bank Q1 Results Review - Weak Performance On Margin Decline, Higher Credit Costs: Systematix

The brokerage assigns Rs 440 per share, post hold co discount, for its holding in the subsidiaries.

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