India’s Leading Private Sector Bank, Kotak Bank, is in focus today as its share plummeted close to 6 percent on an intraday basis, following its weak Q4FY25 results and downgrades from brokerage
With a market capitalization of Rs. 4,10,474 Crore, the stock of Kotak Mahindra Bank opened at Rs. 2,110, down 3.43 percent from yesterday’s close, and after opening, it made another low of Rs. 2058.35, down 5.79 percent. Additionally, the Yearly return for the stock is 27 percent, and the past 5-year return is only 70 percent.
Q4FY25 Consolidated Financial Highlights & Dividend Recommendation
The company reported a 10.66 percent YoY increase in Interest earned from Rs. 15,156.18 Crore in Q4FY24 to Rs. 16,771.93 Crore in Q4FY25. On a QoQ basis, the company reported an increase of 0.83 percent in revenue from Rs. 16,633.14 Crore in the previous quarter.
Their Net profit saw a decrease of 7.57 percent YoY from Rs. 5,337.20 Crore to Rs. 4,932.76 Crore for the same period. On a QoQ basis, the company reported an increase of 4.92 percent in Net profit from Rs. 4,701.02 Crore in the previous quarter.
The Board of Directors of Kotak Mahindra Bank has recommended a dividend of Rs. 2.50 per Equity share of the face value of Rs. 5 for the FY25. The dividend is subject to approval at the AGM.
For the Banking segment of Kotak, it saw a decrease in NIM (Net Interest Margin) from 5.32 percent in FY24 to 4.96 percent in FY25, ROA (Return on Assets) increased from 2.61 percent to 2.65 percent, and the Cost / Income decreased from 45.99 percent to 43.36 percent for the same period. All the data excludes the gain on KGI (Kotak Mahindra General Insurance) divestment.
Total Customer Assets saw an increase of 13 percent from Rs. 4,23,324 Crore to Rs. 4,77,855 Crore, the CASA ratio decreased from 45.40 percent to 43 percent, and the Net NPA decreased from 0.34 percent to 0.31 percent for the same period.
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Brokerage Rational & Target
CLSA has changed its rating to hold from its previous outperform rating, however, the global brokerage firm has raised its target to Rs. 2,225. They mentioned that slow down or moderation in loan growth has prompted them to cut the bank’s profit estimates, factoring in lower NII and higher costs. Their Target price is 7.50 percent higher than the current market price.
Bernstein gave a market perform rating to the Bank with a target of Rs. 1,950 That is similar to the current market price. They cited that the bank’s deposit growth is lower than the top 2 banks i:e, HDFC and ICICI. The brokerage further said that the bank is facing troubles in balancing margin and growth, which is causing a trade-off between earning margins and expanding business
About the Company
Kotak Mahindra Bank is one of India’s leading private sector banks, known for offering a wide range of financial services including commercial banking, investment banking, wealth management, insurance, and asset management.
Headquartered in Mumbai, Kotak Bank serves millions of customers through its extensive branch network across India and has a strong presence in retail banking, corporate banking, and treasury operations. It is also known for its digital initiatives and innovation in banking services.
Written By Abhishek Das
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