Kotak Mahindra's Q1 profit exceeds prediction: Up 81% to ₹6,250cr
What's the story
Kotak Mahindra Bank has reported a significant surge in its net profit for the first quarter of fiscal year (FY) 2025.
The net profit soared by 81% to ₹6,250 crore in the April-June quarter, marking a substantial increase from ₹3,452 crore during the same period last year.
This impressive growth is largely attributed to a boost of ₹3,012 crore in its profit after tax, following the sale of its stake in insurance subsidiary Kotak General Insurance to Zurich Insurance Group.
Surpassing estimates
Brokerage expected a slight uptick
Kotak Mahindra Bank's reported profits have exceeded the average estimate of ₹3,702 crore predicted by eight brokerages.
The bank also saw an increase in its net interest income (NII), which rose by 10% from ₹6,234 crore last year to ₹6,842 crore.
However, this fell short of brokerage estimates which had anticipated an NII of ₹7,087 crore.
The bank's net Interest Margin (NIM) stood at a solid 5.02% for Q1FY25.
Asset performance
Decrease in non-performing assets
Kotak Mahindra Bank reported a decrease in both gross and net non-performing assets (GNPA and NNPA).
The GNPA stood at 1.39% in Q1FY25, down from 1.77% last year.
Similarly, the NNPA also decreased from last year's figure of 0.44% to stand at 0.35% this year.
This indicates an improvement in the bank's asset quality over the past fiscal year.
Financial growth
Advances and deposits witness significant growth
Kotak Mahindra Bank's advances grew by 20% year-on-year (YoY) to ₹4.05 lakh crore compared to ₹3.37 lakh crore on June 30, 2023.
Unsecured retail advances of the bank as a percentage of net advances stood at 11.6% till Q1FY25.
Total deposits at the bank also saw a significant increase, growing by 21% to ₹4.35 lakh crore for Q1FY25 compared to ₹3.61 lakh crore last year, indicating robust financial growth for the bank.