Shares of Kotak Mahindra Bank currently stand at ₹1,745.80, reflecting a 1.07% dip over the past year, as per the latest update. The stock’s performance has been weighed down by concerns over higher provisions and narrowing lending margins, impacting its earnings.
In its recent quarterly results for July-September, Kotak Mahindra Bank reported a 5% year-over-year increase in profit to ₹3,344 crore, which fell short of market expectations due to a notable 80% surge in loan provisions, amounting to ₹660 crore. This increase in provisions was primarily driven by higher potential bad loans, putting pressure on the bank’s profitability.
The bank’s Net Interest Income (NII) for the quarter met expectations, rising by 11.5% year-over-year to ₹7,020 crore. However, the Net Interest Margin (NIM) declined by 11 basis points to 4.9%, a result of regulatory impacts, a reduced share of high-yield unsecured loans, and increased loan slippages.
Analyst Recommendation
Axis Securities recently has recently issued a “buy” recommendation for Kotak Mahindra Bank, setting a target price of ₹1,916. With a current market price of ₹1,741.25 and a market cap of ₹3,47,312 crore, the stock presents an investment opportunity, particularly for those betting on a rebound.
Financial Overview
Kotak Mahindra Bank’s primary revenue streams include interest from loans and advances, income from investments, and interest from balances with the Reserve Bank of India and other inter-bank funds. The bank’s annual revenue for FY 2023 was ₹61,915 crore.
As the Nifty 50 index has shown mixed performance recently, Kotak Mahindra Bank’s prospects may appeal to those with a long-term investment horizon.
Disclaimer: The information provided is for informational purposes only and should not be considered financial or investment advice. Stock market investments are subject to market risks. Always conduct your own research or consult a financial advisor before making investment decisions. Author or Business Upturn is not liable for any losses arising from the use of this information.
