Kotak Mahindra standalone profit rises 29% to 4,212 crore rupees in Q2
Key Facts
Kotak Mahindra Bank reported standalone net profit of 4,212 crore rupees in the second quarter of fiscal 2027, up 29% year on year and 2% from the previous quarter. Profit was 3,253 crore rupees in the second quarter of fiscal 2026 and 4,123 crore in the first quarter of fiscal 2027. Net interest income rose to 8,459 crore rupees, up 16% year on year and 7% quarter on quarter, compared with 7,311 crore a year earlier. The bank said net interest income was one of the drivers of profit growth, alongside lower provisions. The bank also reported consolidated net profit of 5,645 crore rupees, up 26% year on year and 3% quarter on quarter, from 4,468 crore in the year-earlier period and 5,480 crore in the previous quarter.
Provisions fell to 803 crore rupees, down 15% from 947 crore in the year-earlier quarter, but up from 668 crore in the first quarter. The annualised cost of credit was 0.35%, compared with 0.79% a year earlier and 0.46% in the previous quarter. The bank said provisions declined to 803 crore rupees from 947 crore year on year. Slippages fell to 1,230 crore rupees, 24% below 1,629 crore in the second quarter of fiscal 2026. The year-on-year decline in provisions supported the quarter's results, despite an increase from the immediately preceding period.
By contrast, net interest margin fell to 4.31%, from 4.53% in the first quarter and 4.54% a year earlier. The bank attributed the moderation mainly to the mobilisation of FCNR(B) deposits during the quarter. The bank raised about 55,344 crore rupees in these deposits and extended related loans of about 16,110 crore rupees through its international branches. The bank said, "The moderation in net interest margin is largely on account of the mobilisation of FCNR(B) deposits during the quarter." These flows provide context for margin pressure, alongside the reported growth in interest income during the period.
Net advances rose 25% year on year to 577,295 crore rupees on September 30, 2026, compared with 462,688 crore on the same date a year earlier. But the bank said advances growth was 19% after excluding loans against FCNR(B) deposits and the loan portfolio it acquired from Kotak Mahindra Investments. Deposits at the end of the period stood at 651,491 crore rupees, up 23% year on year from 528,776 crore. Excluding FCNR(B) deposits, deposit growth slowed to 13% year on year. The figures show different growth rates for deposits and advances when items linked to FCNR(B) flows and the acquired loan portfolio are excluded.
Asset quality indicators improved from a year earlier, with gross non-performing assets at 1.04% of advances on September 30, 2026, compared with 1.39% a year earlier. The net non-performing asset ratio also fell to 0.24%, from 0.32% on September 30, 2025. These ratios are consistent with the year-on-year decline in loan slippages during the quarter. On the revenue side, fee and service income rose 21% to 2,926 crore rupees, from 2,415 crore a year earlier, and increased 17% from the previous quarter. Operating expenses rose 14% year on year to 5,271 crore rupees, while the cost-to-assets ratio improved to 2.40% from 2.67% a year earlier and 2.66% in the previous quarter.
In morning trade on October 26, 2026, the bank's shares rose 2.2% to 440 rupees, outperforming the broader market, according to Moneycontrol. The coverage said JPMorgan maintained an "overweight" rating on the stock and raised its target price to 492 rupees from 468 rupees. The share move followed the results announcement, while the bank's figures combined profit growth with improvement in some asset quality indicators. At the same time, the results showed net interest margin declining from the previous quarter and the year-earlier period. The share move and recommendation cited remain tied to trading on October 26, according to the published coverage.