Shares of Kotak Mahindra Bank slipped over 4% in early trade on Tuesday, January 27, after the lender reported its December quarter results that came in below Street expectations, despite a modest rise in profit.
Kotak Mahindra Bank posted a 4% year-on-year increase in standalone net profit to Rs 3,446 crore for Q3FY26, compared with Rs 3,305 crore in the same period last year. However, the performance missed analyst estimates, with consensus pegging profit at Rs 3,572 crore, according to LSEG data.
Total income for the quarter rose to Rs 16,741 crore, up from Rs 16,050 crore a year ago. Interest income increased to Rs 13,903 crore, compared with Rs 13,428 crore in Q3FY25. Net Interest Income (NII) grew to Rs 7,565 crore from Rs 7,196 crore in the year-ago period.
However, Net Interest Margin (NIM) declined sharply to 4.54% from 4.93% last year, emerging as a key negative for investors. Provisions also edged higher to Rs 810 crore in the December quarter, compared with Rs 794 crore a year ago.
On the asset quality front, the bank reported improvement, with gross NPA ratio easing to 1.30% from 1.50% a year earlier, while net NPA declined to 0.31% from 0.41%. Capital adequacy ratio stood at 22.63%, slightly lower than 22.79% at the end of December 2024.
On a consolidated basis, Kotak Mahindra Bank’s profit rose 5% year-on-year to Rs 4,924 crore in Q3FY26, compared with Rs 4,701 crore in the corresponding quarter last year. The consolidated profit includes an estimated incremental post-tax cost of Rs 98 crore related to the new Labour Code.
Total customer assets under management increased to Rs 7,87,950 crore as of December 31, 2025, from Rs 6,85,134 crore a year ago, while consolidated net worth stood at Rs 1,75,251 crore.
The combination of a profit miss and margin compression weighed on sentiment, pushing the stock lower despite stable asset quality and steady balance sheet growth.
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