Kotak Mahindra lifts profit 29.48% to 4,211.97 crore rupees in second quarter
Key Facts
Kotak Mahindra Bank reported its second-quarter fiscal 2027 results on October 24, for the period ended September 30, 2026, posting a 29.48% year-on-year increase in standalone net profit to 4,211.97 crore rupees from 3,253 crore rupees in the corresponding period. The result exceeded the market estimate of 4,128 crore rupees, according to NDTV Profit. The board approved the unaudited standalone and consolidated results for the quarter and first half at its meeting, following a recommendation from the audit committee. The bank’s investor relations page places the quarter in fiscal 2027, not calendar 2026 as the earlier draft suggested. The results combine growth in profit and income with quarterly pressure on net interest margin linked to FCNR(B) deposits.
Standalone net interest income reached 8,458.97 crore rupees, up 15.71% from 7,310.74 crore rupees a year earlier, according to Financial Express. But growth in interest income did not prevent margin compression: net interest margin fell to 4.31% from 4.53% in the previous quarter, a decline of 22 basis points. The bank attributed much of the decline to mobilising FCNR(B) deposits, which amounted to 55,344 crore rupees. The bank extended loans worth 16,110 crore rupees from funds raised through these deposits. These figures show the difference between year-on-year growth in interest income and a quarterly decline in margin, amid the volume of deposits and loans linked to this funding source.
Operating activity grew across several lines. Pre-provision operating profit rose 21.15% year on year to 6,382 crore rupees from 5,268 crore rupees in the second quarter of fiscal 2026, according to NDTV Profit. Fee and service income increased 21% to 2,926 crore rupees, compared with 2,415 crore rupees a year earlier. Standalone total income also rose to 19,141.29 crore rupees from 16,238.59 crore rupees, while other income grew 23.34% to 3,193.56 crore rupees, according to Financial Express. For the six months ended September 30, standalone net profit rose 27.54% to 8,334.93 crore rupees from 6,535.01 crore rupees, while total income reached 36,956.98 crore rupees against 33,155.11 crore rupees.
Deposit growth was accompanied by a decline in the current and savings account ratio, known as CASA, to 38.2% in the second quarter from 42.3% a year earlier. The bank said the ratio was 41.8% excluding FCNR(B) deposits, showing their effect on the funding mix. Net advances stood at 5.77 trillion rupees on September 30, up 25% year on year, while total deposits rose 23% to 6.51 trillion rupees. Deposit growth was 13% excluding FCNR(B) deposits, according to Business Standard. Thus, loan and deposit expansion was supported by a significant contribution from these deposits to overall funding growth, while the pace of deposit growth differed when they were excluded.
Asset quality indicators improved at the end of September. The gross non-performing asset ratio fell to 1.04% from 1.39% a year earlier and 1.18% at the end of June, according to Financial Express. The net non-performing asset ratio also declined to 0.24%, compared with 0.32% a year earlier and 0.27% in June. On credit costs, standalone provisions and contingencies, excluding tax, fell 15.18% year on year to 803.56 crore rupees from 947.42 crore rupees. They rose 20.27% from 668.13 crore rupees in the first quarter of fiscal 2027. The annual and quarterly comparisons show different trends in provisions, while non-performing loan ratios declined on both comparison bases.