Kotak Mahindra Bank Q1 preview: Profit may rise up to 26%, NII growth seen in single digits

HDFC Institutional Equities is expecting the private lender to report a 26.2 per cent year-on-year rise in adjusted profit after tax (PAT) at Rs 1,570 crore compared with Rs 1,244.40 crore profit in the year-ago quarter. Sequentially, it expects a 6.6 per cent de-growth in profit.

NII is seen rising 5.9 per cent both YoY and sequentially to Rs 4,070 crore. Pre-provision profit is seen rising 12 per cent YoY (down 13.8 per cent QoQ) to Rs 2,940 crore.

Analysts noted that the second wave has led to massive disruptions in the banking sector, curbing credit growth and asset quality across the sector. They said that restrictions related to lockdowns and risk-aversion by banks led to systemic credit growth coming in single digits, they said in its earnings preview.

“The absence of a moratorium is likely to have resulted in higher restructuring, but the overall impact on asset quality would be lesser, Anand Rathi said.

In case of Kotak Mahindra Bank, Motilal Oswal Securities expects that commentary around stress in SME book and other unsecured loans may keep credit costs elevated. It expects loan growth to remain modest sequentially but believes asset quality may see marginal weakness, with gross non-performing assets at 3.4 per cent. The bank reported a gross NPA of 3.4 per cent in the March quarter and 2.7 per cent in the year-ago quarter.

This brokerage expects Kotak Bank to clock a 25.6 per cent YoY rise in profit at Rs 1,563.40 crore. It sees NII rising 7.7 per cent YoY to Rs 4,012 crore. Deposit growth is seen at 9 per cent YoY, while loan growth is seen at 11.1 per cent YoY.

expects Kotak to report a 10 per cent rise in profit at Rs 1,368.90 crore. It sees NII growing 4.5 per cent YoY to Rs 3,900.50 crore. NIM is seen at 4.5 per cent compared with 4.4 per cent in the year-ago quarter.

“We expect the loan book to contract QoQ, but contained credit should aid profitability,” it said.