Kotak Mahindra Bank reported a standalone quarterly profit of ₹4,120 crore, surpassing analyst estimates by 5%. The bank saw steady loan growth of 15% year-on-year, though a drop in low-cost deposits put some pressure on margins. Investors may track how the bank manages its deposit growth in coming quarters.
Kotak Mahindra Bank announced its financial results for the first quarter of the 2027 fiscal year, reporting a standalone Profit After Tax of ₹4,120 crore. This result reflects a 26% increase compared to the same period last year. The performance exceeded market expectations, largely driven by higher income from non-interest sources and lower provisions for bad loans compared to previous periods.
On a consolidated level, which includes its subsidiaries, the bank's profit rose to ₹5,480 crore, a 23% jump year-on-year. The bank's core business, represented by Net Interest Income, reached ₹7,930 crore. While this matches market forecasts, the Net Interest Margin—a key measure of profitability representing the difference between interest earned on loans and interest paid on deposits—dipped by 14 basis points to 4.53% compared to the previous quarter.
Loan Growth and Deposit Challenges
The bank reported a 15.2% year-on-year growth in total advances, reaching ₹5.1 lakh crore. This expansion was driven by demand from mid-sized companies, small and medium enterprises, and corporate clients. The bank also noted a slight recovery in its credit card portfolio.
However, deposit growth remains a point of focus for investors. While deposits grew 11.7% over the last year, they remained flat on a quarter-on-quarter basis. A significant shift was observed in the Current Account Savings Account ratio, which measures the proportion of deposits that come from low-cost current and savings accounts. This ratio fell by 300 basis points to 40.3%, primarily due to a 13% decline in the current account book. A lower CASA ratio typically means a bank has to rely on more expensive sources of funding, which can create pressure on overall profit margins.
Investor Monitorables
Following the results, some brokerages have maintained a positive outlook on the bank, citing its strong return ratios, with a projected Return on Assets of 2.05% for the current fiscal year. However, for retail investors, the key area to monitor in upcoming quarters will be the bank's ability to attract low-cost deposits. Since the cost of funding has been rising across the banking sector, the bank's capacity to maintain its margins while growing its loan book will be critical. Additionally, investors may look for management commentary on how the bank plans to improve its current account growth, which has historically been a strength of the institution.