Kotak Mahindra Stock Down by More Than 6% After Net Profit Declines

Mumbai, July 28, 2025 – Kotak Mahindra Bank’s standalone net profit for Q1 FY26 stood at ₹3,282 crore, down approximately 7% YoY, missing consensus expectations of around ₹3,497 crore. Despite a 6% rise in Net Interest Income (NII) to ₹7,259 crore and a Net Interest Margin (NIM) of 4.65%, the bank saw margins contract sharply (down ~32 bps QoQ). Provisions surged 109% YoY to ₹1,208 crore, and fresh slippages jumped to ₹1,812 crore (~1.9% of past‑year loans), led by stress in microfinance, retail commercial vehicle (CV) and KCC segments.

As of 10:14 AM IST on July 28, Kotak Mahindra Bank shares were trading at ₹1,988.90, down ₹135.70 or 6.39% for the day, after opening at ₹2,025.30 and hitting an intraday low of ₹1,977.00 and a high of ₹2,055.30.

Key Stock Metrics (As on July 28, 2025)

As of July 28, 2025, the stock opened at ₹2,025.30 and traded within a day high and low range of ₹2,055.30 and ₹1,981.20, respectively. The Volume Weighted Average Price (VWAP) stood at ₹2,011.75. The stock has seen a 52-week high of ₹2,301.90 on April 22, 2025, and a 52-week low of ₹1,679.05 on November 13, 2024. It holds a market capitalization of ₹3.94 lakh crore, with a free float market cap of ₹2.91 lakh crore. The adjusted price-to-earnings (P/E) ratio is 22.26. The stock exhibits a daily volatility of 1.44% and an annualised volatility of 27.51%. Currently active in trading, the stock has been listed since December 20, 1995.

Standalone Financial Highlights (Q1FY26)

In Q1FY26, the bank reported a standalone net profit (PAT) of ₹3,282 crore, down 6.8% year-on-year from ₹3,520 crore (adjusted). Net Interest Income (NII) rose by 6.1% to ₹7,259 crore, while the Net Interest Margin (NIM) stood at 4.65%. Operating profit increased 5.9% to ₹5,564 crore compared to ₹5,254 crore in Q1FY25. Fee and services income remained flat at ₹2,249 crore. Asset quality showed a slight deterioration, with Gross NPA (GNPA) at 1.48% and Net NPA (NNPA) at 0.34%, compared to 1.39% and 0.35% respectively a year ago. The annualised Return on Assets (ROA) and Return on Equity (ROE) were reported at 1.94% and 10.94%, respectively.

*Excluding one-time gain from KGI divestment in Q1FY25

Consolidated Performance Overview

Kotak Mahindra Bank’s Q1FY26 PAT declined to ₹3,282 crore from ₹3,520 crore YoY, while subsidiaries showed mixed performance. Kotak Securities, Life Insurance, and AMC & Trustee reported strong growth, with PATs rising to ₹465 crore, ₹327 crore, and ₹326 crore respectively. Kotak Mahindra Prime and Capital Company also saw moderate gains. However, Kotak Investments’ PAT fell to ₹107 crore, even as Kotak Alternate Asset Managers surged to ₹59 crore from ₹6 crore.

Consolidated PAT rose 1% YoY to ₹4,472 crore, aided by strong subsidiary performance and ₹204 crore investment gain alignment with RBI norms.

Business Metrics Snapshot

• Customer Assets: ₹5.57 lakh crore, up 13% YoY
• Total AUM: ₹7.5 lakh crore, up 18% YoY
  • Equity MF AUM: ₹3.57 lakh crore, up 22% YoY
• Book Value Per Share: ₹829 (vs ₹710 last year), up 17%
• Capital Adequacy (Basel III): 23.7% consolidated, 23.0% standalone
• Liquidity Coverage Ratio: 138%

What Triggered the Stock Fall?

Despite broad-based growth in advances, deposits, and subsidiary income, investors reacted negatively to the 6.8% YoY drop in standalone PAT, especially as it came amid rising NII and stable margins. The divergence in profit growth at the consolidated level (aided by investment gains) versus the core bank performance suggests underlying margin pressures or credit costs that concerned the market.

About the Bank

Kotak Mahindra Bank Ltd is one of India’s premier private sector banks, originally established as a non-banking finance company in 1985 and converted into a bank in 2003. The bank offers a full suite of financial services across retail banking, wealth management, insurance, asset management, and investment banking. As of June 30, 2025, it operates 2,154 branches and 2,927 ATMs, including presence in GIFT City and DIFC (Dubai).

Kotak Mahindra Bank remains listed on both NSE and BSE under the symbol KOTAKBANK.

REF: https://nsearchives.nseindia.com/corporate/Kotakmahindrabank_26072025131428_MediaReleaseQ1FY26signed.pdf

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