Kotak Mahindra Bank Q3 Review - Business Growth Robust; Margins Continue To Scale New Highs: Motilal Oswal

Motilal Oswal Report

Kotak Mahindra Bank Ltd. reported strong earnings in Q3 FY23. Standalone profit after tax rose 31% YoY to Rs 27.9 billion (5% beat), driven by healthy net interest income and controlled provisions as pre provision operating profit grew 43% YoY. Consolidated profit after tax grew 17% YoY to Rs 40.0 billion.

Loan growth remained strong, with margin further expanding by 30 bps QoQ to 5.47%. The current account and savings account ratio, though, moderated 290 bps QoQ to 53.3%.

Gross slippages moderated to Rs 7.5 billion, of which Rs 1.7 billion were upgraded in Q3 FY23. Healthy recoveries and upgrades led to an 18bp/12bp QoQ decline in the gross non-performing asset/net non performing asset ratios.

Kotak Mahindra Bank reversed Rs 376 million of Covid-related provisions; outstanding Covid-related provisions now stand at Rs 4.0 billion (13 bps of loans).

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