Kotak Mahindra Bank Ltd shares jumped over 2% on Tuesday, i.e. 22 July, after the lender said its standalone profit in the first quarter (Q1) of the fiscal year grew 32.7% year-on-year to Rs 1,360.2 crore.
At 10:06 am, shares of Kotak Mahindra Bank were trading at Rs 1,477.15, up 1.6%, on BSE after hitting an intra-day high of Rs 1,486.95. The stock has risen nearly 9% in the last one year.
Kotak Mahindra Bank’s net interest income (NII) during the June quarter increased 22.8% year-on-year to Rs 4,159.1 crore on a loan growth of 18%. Net interest margin at 4.49% was the highest in the last 17 quarters, up from 4.48% in the preceding March quarter and 4.28% in the year-ago quarter.
Gross non-performing assets (NPAs) as a percentage of gross advances increased 2.19% in the June quarter against 2.14% in the previous quarter. Net NPA as a percentage of net advances dropped to 0.73% against 0.75% sequentially.
Provisions and contingencies declined to Rs 316.76 crore in the June quarter from Rs 469.63 crore in the corresponding period last year, but were higher than Rs 171.26 crore in the previous quarter.
Kotak Mahindra Bank said consolidated profit for the June quarter increased to Rs 1,932 crore, growing 23% from Rs 1,574 crore a year ago.
“For Q1 FY20, the bank’s contribution to consolidated PAT (profit after tax) was Rs 1,360 crore and subsidiaries and associates net contribution was 30% of consolidated PAT,” it said.
After the earnings, Credit Suisse was ‘neutral' on the Kotak Mahindra stock with a target price of Rs 1,340. It said that the lender’s Q1 results are largely in line with the estimates and the margin outlook remains strong.
CLSA also maintained its ‘buy’ rating on Kotak Mahindra Bank, while raising its target to Rs 1,750 from Rs 1,665 earlier. It said the scope for re-rating is limited. The brokerage house expected a 22% CAGR (compounded annual growth rate) in profit over FY19-22.
ICICI Securities said the bank posted healthy set of numbers during the quarter helped by a good performance by subsidiaries.