Kotak Mahindra Bank Q2 Results: A Mixed Bag for Investors
Kotak Mahindra Bank’s net interest income or NII for the second quarter grew by 4% year-over-year, rising to Rs 7,311 crore from Rs 7,020 crore in the same period last year. This growth in NII is a positive sign for the bank, indicating a strong performance in its core banking operations.
Operating Profit and Provisioning
The bank’s operating profit also saw a modest increase of 3.3%, reaching Rs 5,268 crore compared to Rs 5,099 crore previously. However, the bank’s provisions saw a sharp increase, jumping by 43.5% year-on-year to Rs 947 crore from Rs 660 crore. This significant rise in provisioning has had a negative impact on the bank’s net profit.
Consequently, the bank reported a Net Profit of Rs 3,253 crore, which was a decline of 2.7% compared to Rs 3,344 crore in the year-ago quarter. This decline in net profit is a cause for concern for investors, as it indicates that the bank’s profitability is under pressure.
Deposit Growth and Asset Quality
The bank’s total deposits increased by 14.5% to stand at Rs 5.28 lakh crore. The CASA or the Current Account Savings Account ratio for the quarter was 42.3%. This showed a growth compared to 40.9% in the preceding quarter. The growth in deposits is a positive sign, as it indicates that the bank is able to attract new customers and increase its deposit base.
In terms of asset quality, the bank showed improvement quarter-over-quarter. The bank’s reported Gross NPA decreased to 1.39% from 1.48%, and the Net NPA improved to 0.32% from 0.34% during the second quarter. This improvement in asset quality is a positive sign, as it indicates that the bank is able to manage its risk effectively.
Loan Portfolio and Net Advances
Fresh slippages during the quarter were Rs 1,629 crore, compared with Rs 1,812 crore in June. Recoveries and upgrades were at Rs 688 crore in the second quarter, up 25% quarter-on-quarter. Supporting its balance sheet growth, the bank’s Net Advances grew by 16% year on year to Rs 4.63 lakh crore, while Total Deposits increased by 14% year on year to Rs 5.28 lakh crore.
Low cost current account savings account or CASA deposits constituted 42.3% of total deposits as of September 2025, compared with 40.9% in the June quarter. Among loan products, the credit card portfolio declined 14% year-on-year to Rs 12,444 crore. Retail microcredit too dipped 41% from a year ago to Rs 5,725 crore. The bank’s home loan and loans against property business rose 18% year-on-year to Rs 1.38 lakh crore. Corporate banking loans also rose 18% to Rs 1.09 lakh crore. Business banking assets were up 20% from last year to Rs 47,825 crore.
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Conclusion
In conclusion, Kotak Mahindra Bank’s Q2 results are a mixed bag for investors. While the growth in NII and deposit base is a positive sign, the decline in net profit due to higher provisioning is a cause for concern. The improvement in asset quality and growth in net advances are also positive signs. However, the decline in credit card portfolio and retail microcredit is a cause for concern. Overall, the bank’s performance is a reflection of the challenges facing the Indian banking sector, and investors should exercise caution when investing in the sector.
