Kotak Mahindra Bank Q1 Preview: PAT may surge 65% YoY, but NIMs to cool off

economictimes.indiatimes.com:

Kotak Mahindra Bank report high double-digit growth in net profit for the quarter ended June. However, net interest margins are seen compressing amid rising cost of funds. The private sector lender is seen reporting sharp 65% YoY growth in net profit for the June quarter to Rs 3,413.4 crore.

Net interest income may zoom 35% YoY to Rs 6,337 crore, observe analysts. The private sector lender is set to report its first quarter earnings on Saturday. Sequentially, the net profit is expected to decline 2.4%, while net interest income may rise about 4%.

Year-to-date, shares of the bank have gained neary 8%, but underperformed Nifty50 by about 3%.Here is a summary of analysts’ expectations on earnings from the lender:Motilal Oswal Securities Expect steady traction in loan and deposit growth. Liability growth will likely remain healthy; margins will moderate to 5.6%. Unsecured loan mix will hopefully maintain an uptrend.

Slippages and credit cost to remain in control.PhillipCapital Loan growth is expected to witness sequential growth, driven by mortgage and unsecured loans. Credit cost should move towards normalisation. Rising cost of funds will put pressure on margins.Nuvama Institutional Equities Expect loan growth of 4% QoQ.

Kotak's NIM may decline 12 bps QoQ, lower than the decline for ICICI Bank, because of improving loan mix. From Q2, however, the decline in NIM could accelerate due to the newly launched sweep deposit scheme.Axis Securities Credit/deposit growth momentum to remain healthy; unsecured loans to inch up in the overall portfolio mix. Margin pressures to surface with the rising cost of funds.