Kotak Mahindra Bank Q1 Results Review - Strong Performance Led By Robust Other Income: Motilal Oswal
Margin contracts 18 basis points QoQ; asset quality steady.
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Motilal Oswal Report
Kotak Mahindra Bank Ltd. reported a robust quarter, with standalone profit after tax increasing 67% YoY to Rs 35 billion (14% beat), driven by higher treasury gains and dividend income of Rs 3 billion from subs.
Consolidated profit after tax grew 51% YoY to Rs 41.5 billion.
Kotak Mahindra Bank's advances grew 17% YoY (3% QoQ) to Rs 329 billion, while margin contracted by 18 bp QoQ to 5.6%. Deposit growth was steady, though the current account and savings account mix moderated 380 bp QoQ due to a shift in savings account deposits toward high-yielding ActivMoney product launched by the bank.
Gross slippages increased 46% QoQ to Rs 12 billion, of which Rs 2.9 billion were upgraded in Q1 FY24. Higher slippages and healthy recoveries held gross non-performing asset/net non-performing asset ratios stable at 1.77%/0.4%.
We increase our FY24/FY25 profit after tax estimates by 7%/5% and revise our target price to Rs 2,170 (3.0 times FY25E book value and Rs 560 for subs). Maintain 'Neutral'.
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