Kotak Mahindra Bank Q2 results tomorrow: Co may report double-digit fall in profit, high slippages likely
NEW DELHI: is likely to report a single-digit de-growth in net profit in the September quarter. Net interest income (NII) growth may also disappoint amid the bank’s conservative approach to loan growth. Funding cost tailwind should help, analysts said. Commentary on restructuring, SME book and credit cost will be keenly watched, they said.
Axis Securities expects the bank to log a net profit of Rs 1,993 crore, down 8.8 per cent over Rs 2,184 crore in the year-ago quarter. It sees NII rising 2.7 per cent YoY to Rs 4,020 crore from Rs 3,913 crore YoY.
Provisions are seen rising 18.9 per cent YoY to Rs 438 crore, even as they may be down 53.10 per cent over June quarter’s Rs 935 crore. Other income is seen nose-diving 89.3 per cent to Rs 155 crore over Rs 1,452 crore YoY.
ICICIdirect sees deposit growth for Kotak Mahindra Bank at 3 per cent YoY, up from 2.3 per cent in the June quarter. It expects NII to grow at 12.8 per cent YoY to Rs 4,014 crore, aided by 7 basis points (bps) margin expansion and pick-up in loan growth. Credit cost may fall 10 bps, it said while projecting net profit at Rs 1,865 crore.
“Asset quality should see an improvement, especially in the retail segment as feet on streets start moving while restructuring should be minimal. Gross NPA is expected to dip 13 bps QoQ to 3.4 per cent,” the brokerage said.
Prabhudas Lilladher said Kotak Bank is likely to be worst impacted from the private bank lot, given conservative approach in lending and high slippages than usual, similar to the last two quarters.
The management commentary around collections, restructuring pool, behavior of ECLGS loans and credit demand will be key, said Nomura India.
“We expect muted loan growth of 7.2 per cent YoY. We factor in margin contraction of 18 bps sequentially, leading to NII growth of 0.2 per cent YoY. We expect a 2.8 per cent YoY decline in PPoP. We factor in slippages of Rs 1,000 crore compared with Rs 1,500 crore in June quarter,” it said.
Nomura India sees profit falling 3.2 per cent YoY at Rs 2,184.50 crore.
Motilal Oswal said gross NPA as a percentage of gross advances may come in at 3.5 per cent compared with 3.6 per cent in June quarter and 2.6 per cent in the year-ago quarter. It sees profit falling 16.9 per cent to Rs 1,815 crore.
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