Kotak Mahindra Bank reported a strong performance for the fourth quarter of FY26, with standalone net profit rising 13 per cent year-on-year to Rs 4,027 crore, driven by improved margins, lower credit costs and steady loan growth. The earnings beat street expectations, prompting several brokerages to upgrade outlooks and highlight the bank’s improving asset quality, operating efficiency and growth visibility, even as it remains cautious about macro uncertainties.
Nuvama On Kotak Mahindra Bank
The brokerage maintains ‘Hold’ with an unchanged target price of Rs 416
PAT beat; margin and credit cost improve
Reported NIM increased 13bp QoQ to 4.67 per cent due to lower day count in Q4FY26
Slippage declines marginally; credit cost falls
Sharp decline in slippages reflects stronger collections, signalling improving asset quality and reduced credit risk.
NIM is expected to decline gradually in FY27E due to higher TD rates, partly offset by CASA growth and unsecured mix.
The bank targets high-teen RoE over the medium term, driven by operating leverage and normalizing credit costs.
Cost-to-asset is expected to improve further on fixed cost cuts and tech efficiencies.
Motilal Oswal On Kotak Mahindra Bank
The brokerage maintains buy with target price of Rs 470
Reported a strong quarter, marked by controlled slippages and credit costs, along with an uptick in NIMs
However, the bank guides for largely flat or slightly lower NIMs in FY27E vs. FY26, as it focuses on elongating deposit tenor , with higher peak rates offered on longer maturities
Unsecured portfolio is showing signs of stabilization, and the bank expects credit costs to remain well contained going ahead.
Marginally upgrade our earnings estimates by 2 per cent for FY27/28E and expect RoA and RoE of 1.96 per cent and 12.1 per cent by FY27.
Kotak Mahindra Bank posted a 13 per cent year-on-year rise in its standalone net profit for the fourth quarter, which stood at Rs 4,027 crore, supported by healthy growth in net interest income and a significant reduction in provisions. The bank had reported a net profit of Rs 3,552 crore in the corresponding quarter last year. For the full financial year FY26, however, standalone net profit declined by 15 per cent year-on-year to Rs 14,008 crore, compared with Rs 16,450 crore in the previous year. The profit in the prior year was elevated due to a one-time gain from the sale of a 70 per cent stake in Kotak General Insurance to Zurich Insurance Company. The transaction, valued at Rs 4,096 crore, resulted in a pre-tax gain of Rs 3,803 crore.
(Disclaimer: The above article is meant for informational purposes only, and should not be considered as any investment advice. ET NOW DIGITAL suggests its readers/audience to consult their financial advisors before making any money related decisions.)
