Kotak Bank Q3 result preview: PAT may grow 15% YoY on strong interest income, lower credit costs
Kotak Mahindra Bank is expected to report a double-digit growth in net profit for the quarter ended December, led by strong interest income, healthy loan growth, lower credit costs, and stable asset quality.
The private sector lender’s net profit for the quarter is seen rising 15.3% year-on-year (YoY) to Rs 3,219 crore, and net interest income is likely to grow by nearly 14% YoY to Rs 6,416 crore, the average of estimates given by 12 brokerage firms showed.
Sequentially, the growth is likely to have slowed down sharply, with net profit seen rising 0.9% and net interest income about 2%.
The lender is scheduled to release its quarterly earnings on Saturday.
Here’s summarising analysts’ expectations on the third quarter earnings scorecard front:
Nuvama Institutional Equities
Given the low base of unsecured loans for Kotak and lower than peers’ CD ratio, we estimate the bank to continue with its strong growth in Q3 FY24. We expect 6% QoQ/19% YoY growth in loans and 4% QoQ/21% YoY growth in deposits.
However, Kotak’s deposit franchise is weaker than the top three private banks. As such, the risk of slower-than-expected deposit growth, in turn, leading to slower loan growth is high for this quarter given soft business updates from other banks.
Management had pointed to a negative one-off of 14-15 bps in NIM in Q2FY24. We anticipate NII growth of 2% QoQ.
KRChoksey Shares
We expect strong loan growth of 18.8% YoY, led by healthy growth in the retail segment across all the segments. The deposits are expected to grow by 20.5% YoY, with an increasing contribution from its new product segment, ActivMoney.
It is expected that the CASA ratio will remain relatively stable sequentially at 48.0%. NII is expected to grow by
