Q3 Results Preview; All eyes will be on Kotak Mahindra Bank’s Q3FY24 performance to be announced on Saturday.
The market nervousness was visible and share price of Kotak Mahindra Bank ended 0.66% lower on Friday on the BSE.
The caution on Banks prevails, as market participants do not take kindly to any disappointments in Q3 performance and even a slight miss in the results on some parameters leads to a sharp correction in share prices as was the case with HDFC Bank.
For Banks while the Credit growth is expected to remain constant. Loan growth is also seen to be good although some analysts say unsecured loan growth is likely to moderate across banks. Also another key that remains to be observed is deposit growth.
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Analysts in their forward-looking reports emphasized that asset quality is likely to remain in a sweet spot, leading to lower slips, but recovery and upgrades are likely to decline as well. Analysts expect banks to report a 15-20 bps decline in NIMs. While loan yields have limited room for expansion, deposit costs are likely to reprice higher.
Kotak Mahindra Bank- Q3 expectations
Analysts at Motilal Oswal Financial Services (MOFSL) expect steady traction in loan growth for Kotak Mahindra Bank during the quarter of December 2024. They expect liability growth to remain healthy for Kotak Mahindra Bank. While Margins are expected to compress further for Kotak Mahindra Bank, asset quality will remain in check.
The Net Interest Income for Kotak Mahindra Bank is expected to grow a healthy 15.2% year-on-year to ₹6510 Crores. Operating profits for Kotak Mahindra Bank at ₹4830 Crore is estimated to increase 25.5% year on year. MOFSL analysts peg Kotak Mahindra Banks net profit at ₹3360 Crore, expected to grow 20.3% per annum.
Business growth momentum is expected to continue, growth in the unsecured portfolio will be watched for, analysts at Axis Securities said in their forecast. A marginal contraction in their view is likely to continue. Axis expects Net Interest Margins to contract by 10-15 basis points. (100 basis points makes a percentage).
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Axis expects cost ratios to remain stable while maintaining operational profitability. Stable credit costs according to Axis should help earnings and Asset Quality is expected to remain stable.
Kotak Mahindra Bank’s CASA (Current and Savings Account) is among the best in class at 46% of NDTL (Net Demand and Time Liabilities) as of 1HFY24, analysts at BNP Paribas said. While the bank’s initial deposit rate used high rates as a hook, current savings accounts are only at a slight premium to those of major private banks. Kotak Mahindra Bank’s quality performance over the last decade is bested only by HDFC Bank among India’s big banks, analysts at BNP Paribas added.
Key monitorable:
Among the key Monitorable from the results according to analysts are
- the Commentary on Net Interest Margins
- Growth outlook, (particularly the growth trajectory here in the unsecured book highlighted analysts at Axis Securities)
Disclaimer: The opinions and recommendations made above are those of individual analysts or trading companies, and not of Mint. We advise investors to check with certified experts before making any investment decisions
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Published: 20 Jan 2024, 09:10 IST
(tagsTo Translate)Kotak Mahindra Bankd