Kotak Mahindra Bank Net Profit Falls 7% In Q2; Shares Gain 3%

On Tuesday, Kotak Mahindra Bank reported a 7% year-on-year (YoY) drop in standalone net profit of Rs 2,032 crore, compared to Rs 2,184 crore in the previous quarter. On a quarterly basis, it increased by 24% from Rs 1,642 crore in the June 2021 quarter. Following the earnings report, Kotak Bank's stock jumped about 3% to 2217 per share on the BSE in Tuesday's trading.

The bank's net interest income (NII), which is the difference between interest received and interest expended, increased by nearly 3% to 4,020.6 crore from 3,897 crore the previous quarter. Provisions and contingencies at the private lender fell to 424 crore from 703.5 crore quarter-on-quarter (QoQ), but increased from 333 crore year-on-year (YoY).

In the September quarter, the gross non-performing assets (GNPA) ratio was 3.19 percent, which was lower than the June quarter's 3.56 percent but higher than the year-ago quarter's 2.70 percent.

Tax expenses for the quarter ended September fell to 664 crore from 744 crore the previous fiscal quarter. In contrast, its capital adequacy ratio (Basel III) was 21.76 percent, down from 23.11 percent QoQ and 22.05 percent year over year.

COVID-19's future direct and indirect impact on the Bank's results of operations, financial condition, and cash flows is unknown and will be determined by current and future events, including attempts to restrict or reduce its spread, it said. As of September 30, 2021, the bank had made provisions of Rs. 1,279 crore for the COVID-19 pandemic.

Over the last three years, net profit per employee has been steadily increasing, with a 13.34 percent increase last year. The stock returned 85.96 percent over three years, compared to 76.81 percent for the Nifty 100. Over a three-year period, the stock returned 85.96 percent, while the Nifty Bank provided investors a 61.47 percent return.