Kotak Bank Q1 preview: Profit may surge up to 45%; NIM may fall sequentially

This brokerage expects NIM for the bank to decline 15-20 bps sequentially. “Key monitorable would be asset quality for the SME segment, another unsecured portfolio, and restructured book,” it said.

Emkay Global expects Kotak to report a 43.3 per cent YoY rise in profit at Rs 2,352.4 crore. It sees NII rising 16.4 per cent to Rs 4,589.90 crore. NIM is seen at 4.7 per cent compared with 4.8 per cent in the March quarter and 4.6 per cent in the year-ago quarter.

pegs profit at Rs 2,120 crore, up 29.3 per cent YoY. It sees NII climbing 17 per cent YoY to Rs 4,610 crore. NIM is seen at 4.65 per cent. Slippage is a percentage of lagged loans is seen at 1.29 per cent, the same as the last quarter and against 2.88 per cent in the year-ago quarter.

“The increase in savings rate for balances above Rs 50 lakh would impact a material portion of savings. Contrary to general belief, for Kotak, high-ticket balances are not a small proportion of total savings. There would be some offset from repo-based repricing. For the bank, the proportion of repo loans at 49 per cent is higher than others. Also, its existing loans linked to repo reprice at the end of the month, in which the hike is announced, which is three months earlier than other banks,” Edelweiss noted.

This brokerage said the bank would have higher mark-to-market (MTM) than other banks, given its higher proportion of available for sale (AFS).

Traction in loan growth remains strong. SMEs, mortgages, cards and PL, including small business loans, are the key drivers of loan growth, it said.

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