Q2 Results 2024 Highlights: Kotak Mahindra Bank reports full impact of RBI tech embargo; CASA ratio at 43.6%

Net profit surged to Rs 153.6 crore, compared to a loss of Rs 19.1 crore in the same period last year.

Revenue rose by 73% to Rs 285.6 crore, up from Rs 165.1 crore year-on-year.

EBITDA reached Rs 179.4 crore, a significant turnaround from an EBITDA loss of Rs 28.6 crore in the previous year.

The margin stands at 62.8%.

Dalmia Bharat reported a net profit of Rs 49 crore for Q2, a decline of 60.5% compared to Rs 124 crore in the same quarter last year. Revenue for the quarter decreased by 2.1%, totaling Rs 3,087 crore, down from Rs 3,153 crore year-on-year. The company’s EBITDA also saw a significant drop of 26.8%, falling to Rs 434 crore from Rs 593 crore in the previous year. As a result, the EBITDA margin decreased to 14.1% from 18.8% year-on-year. The company has also announced an interim dividend of Rs 4 per equity share, amounting to 200%, for the financial year 2024-25.

In terms of asset quality, the bank reported a gross non-performing asset (NPA) ratio of 1.36%. Excluding agricultural loans, the GNPA ratio is at 1.19% for Q2, indicating a stable outlook for the bank's lending portfolio.

HDFC Bank's management shared insights following the release of its Q2 financial results, highlighting strong growth metrics and a positive economic outlook.

The bank anticipates a GDP growth rate of 6.8% to 7% for FY25. Total deposits showed robust growth, increasing by 15.1% year-on-year, while CASA deposits grew by 8.1%. Average deposits reached Rs 23,540 billion, marking a 3.1% increase quarter-on-quarter.

The average CASA ratio stands at 34.3%, reflecting the bank's strong customer deposit base. Gross advances also saw a notable rise, with a 7% year-on-year increase in Q2.

Kotak Mahindra Bank, in a concall after reporting Q2 results, said that the rise in stress within Kotak Mahindra Bank's credit card portfolio aligns with industry trends. Due to the Reserve Bank of India's embargo, the bank's credit card book has not experienced growth. Management indicated that 30-40% of slippage in Q2 FY25 originated from credit cards. They also expressed interest in pursuing more inorganic acquisitions to expand their customer base, provided these opportunities align with their criteria.

During a recent conference call, Kotak Mahindra Bank management reported that they have focused on enhancing the customer experience during this period. However, they also acknowledged experiencing some stress in their unsecured loan portfolio, particularly within the credit card segment. The management noted that the challenges are primarily concentrated in the credit card business.

Kotak Mahindra Bank stated, "This is the first quarter where we saw the full impact of the RBI tech embargo." The bank reported that its CASA ratio has stabilized at 43.6%. However, they noted a slowdown in the rural segment, which is reflected in commercial vehicle, tractor loans, and microfinance initiatives. Additionally, the bank is observing some overleverage among customers, particularly in credit cards and personal loans. Regarding its personal loan portfolio, Standard Chartered remains aligned with the bank's strategy.

Net profit soared 94.7% to Rs 135.1 crore, up from Rs 69.4 crore year-on-year (YoY).

Revenue increased by 18% to Rs 347.7 crore, compared to Rs 294.7 crore in the previous year.

EBITDA rose 68.4% to Rs 134.7 crore, up from Rs 80 crore YoY.

The EBITDA margin improved to 38.7%, compared to 27.2% in the same period last year.

Net profit surged 50% to Rs 602.7 crore, up from Rs 401.7 crore year-on-year (YoY).

Net interest income (NII) also rose by 20%, reaching Rs 2,300.4 crore compared to Rs 1,916.5 crore in the previous year.

The bank's gross non-performing assets (NPA) improved to 3.18%, down from 3.32% quarter-on-quarter (QoQ).

Net NPA decreased to 0.73%, compared to 0.78% in the previous quarter.

The management of RBI Bank announced on October 19 that the stress in the microfinance segment is anticipated to stabilize by the fourth quarter of the current financial year.

“We are carrying a higher amount of contingency buffer on both cards and microfinance. We expect the MFI situation to kind of stabilize by Q3 or early Q4, and by the time we are out of Q4, we will come to normalized levels,” the management stated during the post-earnings conference call.

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

In asset management, the group's total assets under management (AUM) rose significantly to Rs 6.81 lakh crore, marking a 37% year-on-year increase. Kotak Asset Management, the bank's mutual fund subsidiary, experienced a remarkable 60% year-on-year growth in domestic mutual fund equity AUM, reaching Rs 3.19 lakh crore.

Deposits also showed steady growth, with average total deposits increasing by 16% year-on-year to Rs 4.46 lakh crore. This growth was driven by a 26% rise in term deposits, which reached Rs 2.59 lakh crore. Current deposits grew by 6%, while savings deposits saw a 2% increase.

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

Kotak Securities recorded a profit of Rs 444 crore, an increase from Rs 324 crore, while Kotak Mahindra Life Insurance reported a profit of Rs 360 crore, up from Rs 247 crore. Other subsidiaries, including Kotak Mahindra Prime and Kotak Asset Management, also demonstrated year-on-year profit growth.

However, the bank's consolidated return on assets (ROA) declined to 2.53% from 2.68% in the same period last year, and the return on equity (ROE) fell to 13.88% from 14.99%.

Gross NPA stood at 1.36% compared to 1.33% in the previous quarter (QoQ). Net NPA increased to 0.41% from 0.39% QoQ. In absolute terms, gross NPAs rose to Rs 34,250.6 crore from Rs 33,025.7 crore, while net NPAs climbed to Rs 10,308.5 crore from Rs 9,508.4 crore QoQ. Provisions for the quarter amounted to Rs 2,700.5 crore, down from Rs 2,903.8 crore YoY but slightly up from Rs 2,602.06 crore QoQ.

HDFC Bank reported a net profit of Rs 16,820 crore for the second quarter of FY25, marking a 5.3% increase from Rs 15,976.1 crore in the same period last year. The bank's net interest income (NII) also saw a robust 10% growth, rising to Rs 30,113.9 crore from Rs 27,385.2 crore year-on-year (YoY).

Kotak Mahindra Bank reported a net profit of Rs 3,344 crore for the second quarter of FY25, marking a 4.8% increase from Rs 3,190 crore in the same quarter last year. However, the profit fell short of the average estimate of Rs 3,494 crore projected by seven brokerages.

The bank's net interest income (NII) rose by 11% to Rs 7,019.3 crore, slightly surpassing expectations of Rs 6,977 crore. Meanwhile, the net interest margin (NIM) moderated to 4.91%, down from 5.22% in Q2FY24.

Kotak Mahindra Bank announced a net profit of Rs 3,344 crore for the second quarter of fiscal year 2025, reflecting a 4.8% increase YoY. The bank's net interest income, or core income, reached Rs 7,019.3 crore.

RBL Bank reported a 24.3% year-on-year decline in net profit to Rs 222.52 crore for Q2 FY24, with a sequential drop of 40.11%.

The gross non-performing asset (NPA) ratio increased to 2.88% as of September 30, 2024, up from 2.69% on June 30, 2024, but down from 3.12% a year earlier.

The net NPA ratio rose to 0.79% as of September 30, 2024, compared to 0.74% on June 30, 2024, and 0.78% on September 30, 2023.

Earlier this month, UCO Bank reported an 18.56% year-on-year (YoY) growth in total advances, reaching Rs 1.98 lakh crore in Q2 FY24, up from Rs 1.93 lakh crore in Q1 and Rs 1.67 lakh crore in the same period last year.

Domestic advances increased to Rs 1.74 lakh crore in Q2, marking a 21.68% YoY rise and a 4.19% quarter-on-quarter (QoQ) increase.

Total deposits grew 10.84% YoY to Rs 2.76 lakh crore in Q2 FY24, with domestic deposits rising 8.20% YoY to Rs 2.64 lakh crore. CASA domestic deposits reached Rs 1 lakh crore, compared to Rs 0.98 lakh crore in the previous quarter and Rs 0.93 lakh crore a year earlier.

Kotak Mahindra Bank is projected to post a 9.4% year-on-year (YoY) increase in net profit to Rs 3,494 crore for Q2, according to the average estimates of seven brokerage firms.

The bank’s Net Interest Income (NII) is also expected to rise by 10% YoY, reaching Rs 6,977 crore for the July-September quarter. Read on

HDFC Bank is expected to report an 11.5% year-on-year (YoY) rise in Net Interest Income (NII) to Rs 30,306 crore for the July-September quarter. Additionally, the bank’s net profit is estimated at Rs 16,570 crore, reflecting a 3.7% YoY increase, according to the average estimates from seven brokerage firms.

Net Interest Margins (NIMs) are projected to remain stable quarter-on-quarter (QoQ), with a slight positive trend. Gross Non-Performing Assets (GNPA) are expected to increase by 1.28% QoQ, according to PL Capital.

Regarding credit and deposit growth, Motilal Oswal Financial Services predicts that loans will grow at a moderate 7.9% YoY, while deposits are expected to rise by 13.7% YoY in Q2. Emkay Global Financial Services noted that slower credit growth and higher operating expenses due to franchise expansion could limit earnings. Read

Tech Mahindra reported a net profit of Rs 1,250 crore for the second quarter ended September 30, 2024, marking a 153.1% year-on-year (YoY) increase, surpassing Street estimates. This significant growth comes as the company undergoes business restructuring under the new leadership of CEO and MD Mohit Joshi. Read more

According to Bloomberg estimates, analysts project that HDFC Bank will likely report a net profit of Rs 16,284 crore for the September quarter.