Q4FY22 Preview: Kotak Mahindra Bank: NII seen at Rs45.9 billion, PAT at Rs24.6 billion

3 May 2022 , 11:51 PM

Result date: 4^th May, 2022
Recommendation: Add
Target price: Rs2,100

Kotak Mahindra Bank’s loan growth is estimated at 22% over the year-ago quarter, amid continued momentum built since the last two quarters. Consequently, its Net Interest Income (NII) growth is pegged at 19% over the year-ago quarter.

Net Interest Margin could stay stable within the narrow band of 4.5-4.6%. Slippages are likely to trend south, aiding asset quality ratios, particularly on a sequential basis.

Increased operating expenses could lead to 8% growth in pre-provisioning operating profit over the year-ago quarter. However, moderating credit costs could drive earnings growth in the quarter. The bank’s Profit After Tax or PAT could grow 46% on a year-on-year basis.

Important management insights to watch out for:
·         Asset quality trends
·         Credit demand across segments

Rs Billion	March 2022 estimates	QoQ change	YoY change
Net Interest Income (NII)	45.9	6%	19%
Total Income	67.7	19%	17%
Pre-Provisioning Operating Profit	36.6	36%	8%
Profit After Tax (PAT)	24.6	15%	46%

Source: IIFL Research