Indian billionaire banker, Uday Kotak Bank will announce its financial results for the fourth quarter of FY3 on Saturday. Kotak Mahindra Bank share price will be in focus on Friday accordingly. Kotak is expected to report a broadly healthy quarter, with net interest income (NII) seen to register strong growth on the back of a robust loan book. Margins are likely to improve further and asset quality will remain stable. Apart from the Q4 numbers, dividend for FY23 is also on the table for Kotak.
Kotak Bank The next major Q4 result will be in the banking sector.
On April 29, the Board of Directors of Kotak Bank will meet to consider and approve the standalone and consolidated financial results for the quarter and year ended March 31, 2023. Also, the Board shall recommend dividend, if any, on the equity shares for the financial year.
Currently, Kotak’s counterparts like HDFC Bank, ICICI Bank, IndusInd Bank and Axis Bank have also declared dividend for the financial year.
Kotak Bank’s Fourth Quarter Preview:
In its preview note, Axis Securities said Kotak Bank’s advance growth remains strong, and traction on unsecured products is set to remain healthy. Furthermore, NII is expected to remain strong and margins are likely to remain at ~5.5%. While the brokerage expects the cost ratio to remain flat sequentially, PPOP growth will remain healthy. Asset quality also looks stable.
For the fourth quarter of FY23, brokerage ICICI Direct expects Kotak Bank to post a strong growth of 21.5% YoY and 6.1% QoQ. 3.29 lakh crore while deposits are expected to grow by 13.5% YoY and 2.6% QoQ 3.53 lakh crore. The CASA ratio will remain roughly constant at 54% deposits. NII estimated to grow by 31.5% YoY 5946 crore, while NIM is expected to improve by ~23 bps QoQ at 5.7%. A slight improvement in C/I ratio can be seen in Q4FY23 (C/I being at ~50%).
Thus, ICICI Direct’s note said, “We expect 7.9% YoY and 6.9% Q-o-Q growth. 2984 crores. The GNPA ratio is expected to improve by ~20 bps QoQ to 1.70%.”
Meanwhile, Prabhudas Lilladher in its report said, “Kotak’s loan traction has been strong and we expect this momentum to continue and generate 21% YoY and 5.6% QoQ growth.” Additionally, the brokerage expects credit cost to remain the same with a PCR of around 78%. However, it believes that growth in Casa will slow further, hence marginal improvement in margins.
The key observable has a comment on NIM and development approaches.
During December 2022 quarter, Kotak beats PAT estimates 2,791.88 crore registering a growth of 30.99% year-on-year. In addition, came to NII 5,653 crore in Q3 of FY23 by 30.43 YoY. Net Interest Margin (NIM) increased to 5.47% in Q3FY23. Notably, the bank saw a jump in its provisions and contingencies which 148.83 crore in the quarter.
As on December 31, 2022, the gross NPA of the bank stood at 1.90%, while the net NPA stood at 0.43%.
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