Q1FY23 Preview: Kotak Mahindra Bank: Net Interest Income seen at Rs46.7 billion, PAT at Rs22.5 billion

22 Jul 2022 , 05:19 PM

Result date: 23^rd July, 2022
Recommendation: Add
Target price: Rs2,030

Kotak Mahindra Bank could record 30% year-on-year growth in overall loans (up 4% sequentially). Momentum in deposit growth could be healthy with 13% growth over the year-ago quarter and 4% sequentially. Net Interest Income could grow 19% during the quarter.

Higher cost of funds as well as high base of March 2022 quarter could keep Net Interest Margin flat. During the March 2022 quarter, the bank’s Net Interest Margin stood at 4.8% - highest since Q2FY15).

Provisions are likely to decline both on a year-on-year basis (down 64%) and sequentially (down 182%). Overall asset quality will remain healthy. This will drive a 12% year-on-year increase in pre-provisioning operating profit.

The bank’s standalone Profit After Tax (PAT) could grow 37% on a year-on-year basis.

Important management insights to watch out for:

• Trends in loan growth, margins
• Outlook on asset quality

(Rs billion)	June 2022 estimates	YoY change	QoQ change
Net Interest Income	46.7	19%	3%
Total Income	62.7	19%	(1)%
Pre Provisioning Op. Profit	32.3	12%	(3)%
Profit After Tax	22.5	37%	(19)%

Source: IIFL Research