Fee income should remain strong due to loan growth and digital initiatives. Low cost deposit flow should be strong for the bank while GNPA below 2.25 percent will be positive.
Private sector bank Kotak Mahindra Bank is scheduled to report its September quarter earnings on October 22, 2019.
Research and broking firm KR Choksey expects Kotak Mahindra Bank to report a net profit at Rs 1,511 crore up 32.3 percent year-on-year (up 11.1 percent quarter-on-quarter).
Net Interest Income (NII) is expected to increase by 23.7 percent YoY (up 4.8 percent QoQ) to Rs 3,326 crore. Pre-Provision Profit (PPP) is likely to rise by 18.8 percent YoY (up 3.7 percent QoQ) to Rs 2,488 crore.
ICICIdirect, on the other hand, expects the bank to report net profit at Rs 1,576.1 crore up 38.1 percent YoY (up 15.9 percent QoQ). Net Interest Income (NII) is expected to increase by 18.7 percent YoY (up 0.6 percent QoQ) to Rs 3,191.3 crore. Pre-Provision Profit (PPP) is likely to rise by 15.3 percent YoY (up 0.7 percent QoQ) to Rs 2,415.9 crore.
Motilal Oswal expects the bank to report loan growth of 18 percent YoY and post deposit growth at 18 percent YoY in 2QFY20. Margins are likely to contract slightly to 4.4 percent. Overall, the research firm expects NII growth of 21 percent YoY adding that CASA retention would be a key driver of NII and NIM.
With strong digital initiatives and fast-paced customer acquisition, fee income would be a key growth driver for the bank and factor in other income growth of 5 percent YoY in 2QFY20, driven mostly by healthy fee traction and expect the trend to continue, it said.
Motilal Oswal expects asset quality to remain stable, with GNPA at 2.2 percent and NNPA at 0.7 percent and standalone PBT to grow at 21 percent YoY to Rs 21.1 billion against Rs 20.8 billion in 1QFY20. PAT is estimated at Rs 15.4 billion for 2QFY20
Key things to watch:Net-interest margin (NIM) above 4.2 percent will be positive while loan growth above 18 percent will be positive. Fee income should remain strong due to loan growth and digital initiatives. Low-cost deposit flow should be strong for the bank while GNPA below 2.25 percent will be positive, according to a poll by CNBC-TV18.Get access to India's fastest growing financial subscriptions service Moneycontrol Pro for as little as Rs 599 for first year. Use the code "GETPRO". Moneycontrol Pro offers you all the information you need for wealth creation including actionable investment ideas, independent research and insights & analysis For more information, check out the Moneycontrol website or mobile app.