Kotak Mahindra Bank Q3FY22 Preview: NII seen at Rs41.4 billion, PAT at Rs21.1 billion

28 Jan 2022 , 12:19 PM

Result date: 28th January, 2022

Recommendation: Add

Target price: Rs2,230

(Source: Company, IIFL Research)

Kotak Mahindra Bank could report PAT of Rs21.1 billion in the quarter, a YoY growth of 14%. Loan growth could pick up to ~16% YoY and to 6% on a sequential basis.

Net Interest Margin is likely to stay stable at 4.5% owing to lower cost of funds. Growth in pre-provisioning operating profit (PPOP) is likely to moderate amid higher operating expenses. Decline in credit costs though could help overall profitability of the bank.

Lower slippages are likely to be reflected in Gross NPA, which could come down as compared to Q2FY22.

Important management insights to watch out for:

• Commentary around stress in SME book, other unsecured loans
• Outlook on credit costs

Rs. Billion	December 2021 estimates	YoY change	QoQ change
NII	41.4	7%	3%
Total Income	60.9	18%	4%
PPOP	31.7	9%	2%
PBT	28.0	13%	4%
PAT	21.1	14%	4%

Source: Company, IIFL Research