Kotak Mahindra Bank Q4 preview: Profit may jump 60%; provisions likely to stay high QoQ

NEW DELHI: is expected to report up to 60 per cent year-on-year rise in net profit for the March quarter on a likely drop in provisions, while provisions, too, are expected to remain elevated on a sequential basis.

Other incomes may decline up to 70 per cent YoY, various brokerage estimates showed.

The growth in net interest income (NII) for the quarter may stay in the 15-16 per cent range, while net interest margin (NIM) may contract 20-40 basis points, analysts said, and projected asset quality to stay strong.

The private lender has shown promising signs on growth in the secured segment, mainly mortgages. All eyes would be on the management commentary on restructuring, analysts said.

Axis Securities expects the private lender to report a 36.8 per cent rise in net profit at Rs 1,733 crore compared with Rs 1,267 crore in the same quarter last year. It sees other income falling 73.6 per cent YoY to Rs 1,334 crore compared with Rs 5,049 crore in the year-ago quarter.

Provisions may fall 23.4 per cent to Rs 803 crore compared with Rs 1,047 crore in the year-ago quarter. The bank had made Rs 599 crore in provisions in December quarter.

NII, meanwhile, is seen growing 15.9 per cent YoY to Rs 4,127 crore.

“NII growth may remain steady led by lower cost of funds and strong CASA. Sequentially provisioning should remain elevated. The management’s commentary on restructuring will be the key monitorable,” Axis Securities said.

Elara Capital sees profit for the private bank climbing 57 per cent YoY to Rs 1,986.60 crore on a 15 per cent rise in NII at Rs 4,082 crore. Sharekhan sees profit growth surging 66 per cent YoY to Rs 2,103 crore on an 18.4 per cent rise in NII at Rs 4,214 crore.

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“We expect growth to be reasonably healthy, but lower NIMs (due to interest reversal) and higher opex should weigh on PPoP. We expect the underlying asset quality trend to be stable to better QoQ,” said Emkay Global.

PPoP stands for pre-provision operating profit.

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