Kotak Mahindra Bank eyes tractor demand revival in H2 despite flat growth in H1

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Kotak Mahindra Bank's tractor financing business remained flat in the first half of the financial year, following an 8 percent decline in the previous year as it faced challenges from erratic climatic conditions and a slower rural economy, said Shanti Ekambaram, said Deputy Managing Director and Whole Time Director at Kotak Mahindra Bank.

However, the lender continues to focus on the segment as it expects a revival in tractor demand in H2FY25 because of the government's rural infrastructure push, she said in Kotak Mahindra Bank's Q2FY25 conference call. She added, "We also expect the cash flow in the rural and semi-urban areas to improve and hope to see better collection efficiencies in a tractor in H2."

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The bank's micro-credit segment fell by 4 percent in Q2FY25 and is expected to slowdown in the current quarter as well, said Ekambaram. The slowdown was driven by over-leveraged borrowers and weaker rural household incomes, leading to increased delinquencies, said the management. The bank expects the slowdown to continue over the next two to three quarters.

Kotak Mahindra Bank reported a net profit of Rs 3,344 crore for Q2 FY25, a 4.8 percent increase year-on-year (YoY). 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. The lender's net interest margin (NIM) moderated to 4.91 percent from 5.22 percent a year ago.

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Kotak Mahindra Bank's deposits saw steady growth, with average total deposits increasing by 16 percent YoY to Rs 4.46 lakh crore.