India’s banking sector is dynamic and growing rapidly, with several banks showing significant growth potential. Here is the comparison between Kotak Mahindra Bank and Axis Bank, the 3rd and the 4th biggest private sector banks in India, based on recent performance. These banks are considered to have strong potential to emerge as key players in the banking industry’s future.
Company Overviews
Axis Bank Limited is a private sector bank.It has the third-largest network of branches among private sector banks and an international presence through branches in DIFC (Dubai) and Singapore along with representative offices in Abu Dhabi, Sharjah, Dhaka, and Dubai and an offshore banking unit in GIFT City
Axis Bank is catering to a customer base of over 5.9 crores. The bank operates a robust network of 5,876 branches across the country. It is the 4th largest credit card issuer in India, and manages assets worth Rs 5.92 trillion under its Retail wealth management division, reflecting its strong presence in the financial services sector.
Kotak Mahindra Bank is a diversified financial services group providing a wide range of banking and financial services, including Retail Banking, Treasury and Corporate Banking, Investment Banking, Stock Broking, Vehicle Finance, Advisory services, Asset Management, Life Insurance, and General Insurance.
Kotak Mahindra Bank serves a customer base of over 5.3 crore across India. The bank operates through 2,148 branches and has a network of 3,295 ATMs nationwide. The total Group Assets Under Management (AUM) stands at approximately Rs 6.70 lakh crore, supported by a widespread presence of 5,381 group branches across various financial services under the Kotak Group.
Stock performance
Kotak Mahindra Bank Ltd has a current market capitalization of Rs 4,13,024.72 crores, with the previous closing price of the stock being at Rs 2,077.30. The stock has given 22.78 percent in the past year.
Axis Bank Ltd has a current market capitalization of Rs 3,69,539.25 crores, with the previous closing price of the stock being at Rs 1,209. The stock has given 2.06 percent in the past year.
Financial performance
Kotak Mahindra Bank, the revenue from the operations of the bank has dipped by 2.63 percent YoY from Rs 27,907 crores in Q4FY24 to Rs 27,174 crores in Q4FY25, but it has improved QoQ by 13.4 percent from Rs 23,945 crores in Q3FY25 To Rs 27,174 crores in Q4FY25 the net profits of the company has decreased by 6.36 percent from Rs 5,242.25 crores in Q4FY24to Rs 4,908.94 crores in Q4FY25 and the net profits have grown by 5.8 percent QoQ from Rs 4,639.63 crores in Q3FY25 to Rs 4,908.94 crores in Q4FY25
Axis Bank Limited, the revenue from the operations of the bank has surged by 5.61 percent YoY from Rs 37,836 crores in Q4FY24 to Rs 39,958 crores in Q4FY25, but it has improved QoQ by 2.5 percent from Rs 38,959 crores in Q3FY25 to Rs 39,958 Crores in Q4FY25, whereas the net profits of the company has decreased by 1.63 percent from Rs 7,613.55 crores in Q4FY24 to Rs 7,489.71 crores in Q4FY25, and the net profits have grown by 10.7 percent QoQ from Rs 7,613.55 crores in Q3FY25 to Rs 7,489.71 crores in Q4FY25
Ratio Analysis
Kotak Mahindra Bank is trading at Rs 2,076. The stock has a Price-to-Earnings (P/E) ratio of 21.4, compared to the industry average P/E of 13. The Price-to-Book (P/B) ratio stands at 2.66, with a Book Value of Rs 792. The bank offers a modest dividend yield of 0.10 percent and has a Return on Equity (ROE) of 13.4 percent, while the Return on Capital Employed (ROCE) is 7.64 percent.
Axis Bank is currently trading at Rs 1,192, The stock has a P/E ratio of 13.2, slightly above the industry average of 13. Its Price-to-Book (P/B) ratio stands at 1.98, with a Book Value of Rs 601 per share. The bank offers a dividend yield of 0.08 percent. It has a strong Return on Equity (ROE) of 16.4 percent and a Return on Capital Employed (ROCE) of 7.11 percent.
Key metrics comparisons
Capital Adequacy Ratio: Axis Bank reported a Capital Adequacy Ratio (CAR) of 17.07 percent, reflecting a stable capital position in line with regulatory requirements. In comparison, Kotak Mahindra Bank demonstrated a significantly stronger capital buffer with a CAR of 23.3 percent, indicating robust financial resilience and a greater capacity to absorb potential risks while supporting future growth.
Net Advances: As of Q4FY25, Axis Bank’s Retail net advances stood at Rs 6,22,897 crore, marking a 7 percent year-on-year (YoY) growth from Rs 5,83,265 crore in Q4FY24. Meanwhile, Kotak Mahindra Bank’s retail net advances reached Rs 4,26,909 crore in Q4FY25, reflecting a solid 13.5 percent YoY growth from Rs 3,76,075 crore in the corresponding quarter of the previous year. This growth highlights the continued expansion of both banks’ lending portfolios.
Net interest income and Net Interest Margin:In Q4FY25, Kotak Mahindra Bank reported a robust Net Interest Margin (NIM) of 4.96 percent, with Net Interest Income (NII) amounting to Rs 7,284 crore, reflecting its strong lending efficiency and asset quality. In comparison, Axis Bank posted a NIM of 3.97 percent for the same period, with a significantly higher Net Interest Income of Rs 13,811 crore, driven by its larger loan book and broader customer base.
CASA ratio
As of Q4FY25, Kotak Mahindra Bank reported a CASA ratio of 43 percent, with total CASA deposits amounting to Rs 2,14,416 crore, indicating a healthy share of low-cost deposits in its overall deposit base. In comparison, Axis Bank reported a CASA ratio of 41 percent, with a significantly larger CASA deposit base of Rs 4,78,188 crore, reflecting its strong retail banking presence and wide deposit mobilization capabilities.
Non-Performing Assets
As of Q4FY25, Kotak Mahindra Bank reported a Gross Non-Performing Assets (GNPA) ratio of 1.42 percent and a Net NPA (NNPA) of 0.31 percent, reflecting strong asset quality and prudent risk management. In comparison, Axis Bank reported an even lower GNPA of 1.28 percent and NNPA of 0.33 percent, showcasing consistent improvement in asset quality and effective credit risk controls.
Both Kotak Mahindra Bank and Axis Bank exhibit strong fundamentals and growth trajectories, each with unique strengths. Kotak stands out with superior margins and capital adequacy, while Axis leads in scale, reach, and net interest income.
Written By Likesh Babu S
Disclaimer
The views and investment tips expressed by investment experts/broking houses/rating agencies on tradebrains.in are their own, and not that of the website or its management. Investing in equities poses a risk of financial losses. Investors must therefore exercise due caution while investing or trading in stocks. Trade Brains Technologies Private Limited or the author are not liable for any losses caused as a result of the decision based on this article. Please consult your investment advisor before investing.
