Kotak Mahindra Bank shares gain 2% on robust Q3 results

Snapping two session losing streak, shares of Kotak Mahindra Bank rose nearly 2% in opening trade on Monday as investors reacted to the private sector lender’s third quarter results released over the weekend. In comparison, the BSE Sensex was trading 175 points, or 0.3%, higher at 60,796 levels, while the S&P BSE Bankex index was up 0.75%.  

Kotak Mahindra Bank share price gained as much as 1.85% to ₹1,796 against the previous closing price of ₹1,763.25 on the BSE. The market capitalisation of the private lender stood at ₹3.53 lakh at the time of reporting.  

The private lender has given a negative return of 3% in the last one year, while it dropped over 1% in six month period. The stock has fallen 2.7% in the past one month and more than 1% in a week. Kotak Bank shares touched a 52-week high of ₹1,997 on November 18, 2022, while it hit a 52-week high of ₹1,630 on June 30, 2022.

For the December quarter of 2022 (Q3 FY23), the bank reported profit after tax (PAT) at ₹2,792 crore, up 31% from ₹2,131 crore in Q3FY22. In the September quarter of the current fiscal, PAT stood at ₹2,581 crore.

Net Interest Income (NII) of the lender rose to ₹5,653 crore, up 30% YoY from ₹4,334 crore in Q3 FY22. Net Interest Margin (NIM) was 5.47%, while fees and services stood at ₹1,847 crore, up 23% YoY during the quarter under review.

Operating profit for Q3FY23 was ₹3,850 crore, up 43% YoY from ₹2701 crore in the corresponding period last year.

On the asset quality front, the banking major saw its gross non-performing asset (NPA) ratio falling to 1.91% from 2.75% in the year-ago period and 2.09% in the previous quarter. The net NPA too declined to 0.48% from 0.87% in the same period last year and 0.6% in Q2 FY23. However, the bank’s provisions and contingencies rose sharply to ₹148.83 crore, from provisions loss of ₹131 .74 crore last year. In Q2 FY23, it stood at ₹137 crore.

“As at December 31, 2022, Covid-related provisions stood at ₹400 crore. In accordance with Covid Resolution Framework announced by RBI, the bank has standard restructured fund-based outstanding of ₹281 crore (0.09% of Advances),” Kotak bank said in its release.  

The bank’s total advances rose 23% YoY and 6% QoQ to ₹310,734 crore as of December 31, 2022, from ₹2,52,935 crore in Q3 FY23 and ₹2,94,023 crore Q2 FY23. Under the advances, the bank registered 29% YoY growth in home loans, while the credit cards division posted an increase of 85% YoY to ₹9,159 crore.

Meanwhile, total deposits rose 12.89% YoY and 5.98% QoQ to ₹344,666 crore. Customer assets, which comprise advances and credit substitutes, increased by 24% to ₹3,39,313 crore, from ₹ 2,74,569 crore in Q3 FY22 and ₹3,21,324 crore in Q2 FY23. CASA ratio as at December 31, 2022 stood at 53.3%.