Kotak Mahindra Bank Q2 results: Net profit rises 5% to Rs 3,344 crore, misses market estimates

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26 Aug, 2025 12:21

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Kotak Mahindra Bank reported a net profit of Rs 3,344 crore for Q2 FY25, marking a 4.8 percent increase from Rs 3,191 crore in the corresponding quarter of the previous fiscal year. This fell short of the average estimate of seven brokerages, which had projected a net profit of Rs 3,494 crore.

The private sector bank’s net interest income (NII) in the July-September quarter rose 11 percent year-on-year to Rs 7,020 crore, exceeding brokerage expectations of Rs 6,977 crore. However, net interest margin (NIM) moderated to 4.91 percent from 5.22 percent a year ago.

Kotak Mahindra Bank’s gross non-performing assets (NPAs) shrunk to 1.49 percent by the end of September 2024 from 1.72 percent a year ago; while net NPAs (NNPAs) expanded to 0.43 percent from 0.37 percent.

Consolidated results and subsidiaries' contributions

At the consolidated level, Kotak Mahindra Bank's net profit rose 13 percent year-on-year to Rs 5,044 crore in Q2 FY25 from Rs 4,461 crore in Q2 FY24. Significant contributions came from its subsidiaries, with Kotak Securities posting a profit of Rs 444 crore, up from Rs 324 crore, and Kotak Mahindra Life Insurance recording a profit of Rs 360 crore, up from Rs 247 crore. Other key subsidiaries like Kotak Mahindra Prime and Kotak Asset Management also saw year-on-year profit growth.

The bank's consolidated return on assets (ROA) for the quarter fell to 2.53 percent from 2.68 percent in the same period last year, while its return on equity (ROE) also decreased to 13.88 percent from 14.99 percent.

Balance sheet and customer base growth

Kotak Mahindra Bank's customer assets grew 18 percent year-on-year to Rs 4.50 lakh crore by the end of September. Advances, including Interbank Participation Certificates (IBPC) and Bills Rediscounting Schemes (BRDS), increased by 17 percent to Rs 4.19 lakh crore. The bank's customer base expanded to 5.2 crore by the end of September 2024, up from 4.6 crore in September 2023.

Deposits saw steady growth, with average total deposits increasing by 16 percent year-on-year to Rs 4.46 lakh crore, led by a 26 percent rise in term deposits to Rs 2.59 lakh crore. Current deposits grew by 6 percent, while savings deposits rose 2 percent.

Capital adequacy and asset management

As of September 30, 2024, Kotak Mahindra Bank’s consolidated capital adequacy ratio under Basel III norms stood at 22.6 percent, while its Common Equity Tier 1 (CET1) ratio was 21.7 percent, both indicating a strong capital position.

In terms of asset management, the group’s total assets under management (AUM) rose significantly to Rs 6.81 lakh crore, marking a 37 percent year-on-year increase. Kotak Asset Management, the bank’s mutual fund subsidiary, saw a 60 percent year-on-year jump in domestic mutual fund equity AUM to Rs 3.19 lakh crore.