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Kotak Mahindra Q2 Profit Dips 2.7% Amid Strong Loan Growth and Asset Quality

Kotak Mahindra Bank reported a slight decline in quarterly net profit despite showing strength in other key areas. The bank's loan book expanded significantly while maintaining healthy asset quality metrics. Net interest income continued to grow, reflecting stable operational performance. Overall, the results indicate balanced growth with improved efficiency ratios across the board.

Key Points: Kotak Mahindra Bank Q2 Net Profit Falls to Rs 3253 Crore

  • Net profit declined 2.7% YoY to Rs 3,253 crore in Q2 FY26
  • Net interest income grew 4% to Rs 7,311 crore with NIM at 4.54%
  • Advances expanded 16% to Rs 4.62 lakh crore showing strong credit demand
  • Gross NPA ratio improved to 1.39% from 1.49% year-on-year
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Kotak Mahindra Bank's Q2 net profit dips 2.7 pc to Rs 3,253 crore

Kotak Mahindra Bank reports 2.7% dip in Q2 net profit to Rs 3,253 crore despite robust loan growth, improved asset quality and steady NII growth.

Kotak Mahindra Bank's Q2 net profit dips 2.7 pc to Rs 3,253 crore
"Despite the marginal dip in profit, the bank's net interest income rose 4 per cent - Kotak Mahindra Bank Exchange Filing"

Mumbai, Oct 25

Private sector lender Kotak Mahindra Bank on Saturday reported a 2.7 per cent year-on-year (YoY) decline in its net profit at Rs 3,253 crore for the July-September quarter (Q2 FY26).

The bank had posted a net profit of Rs 3,344 crore in the same period last year.

Despite the marginal dip in profit, the bank’s net interest income (NII) rose 4 per cent (on-year) to Rs 7,311 crore from Rs 7,020 crore in Q2 FY25, while the net interest margin (NIM) stood at a healthy 4.54 per cent.

The lender’s advances book expanded 16 per cent on-year to Rs 4,62,688 crore (as of September 30), from Rs 3,99,522 crore a year earlier, reflecting robust credit demand.

On the liabilities side, average total deposits grew 14 per cent (on-year) to Rs 5,10,538 crore, compared with Rs 4,46,110 crore in Q2 FY25. Average current deposits also rose 14 per cent to Rs 70,220 crore from Rs 61,853 crore in the corresponding quarter last year.

Asset quality saw further improvement, with the gross non-performing assets (GNPA) ratio declining to 1.39 per cent as of September 30, 2025, from 1.49 per cent a year ago.

The Net NPA (NNPA) ratio also improved to 0.32 per cent from 0.43 per cent in the same period. The bank’s Provision Coverage Ratio (PCR) remained strong at 77 per cent.

According to its exchange filing, CASA ratio (as at September 30) stood at 42.3 per cent and Credit to Deposit ratio stood at 87.5 per cent. Standalone Return on Assets (ROA) for Q2 FY26 (annualised) was 1.88 percent while Return on Equity (ROE) was 10.38 percent on an annualised term.

- IANS

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Reader Comments

R
Rohit P
As a long-term investor in Kotak, I'm not worried about this small profit decline. The 16% growth in advances and 14% deposit growth shows strong fundamentals. The improving asset quality metrics are more important for sustainable growth.
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Arjun K
Honestly expected better from Kotak. With the current economic growth, a profit decline even if marginal is disappointing. Hope they bounce back stronger in Q3. The ROE of 10.38% could be better compared to peers.
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Sarah B
The CASA ratio at 42.3% is impressive! Shows strong retail banking fundamentals. As someone who banks with Kotak, their service quality remains top-notch. Small profit fluctuations are normal in banking cycles.
V
Vikram M
Credit growth of 16% YoY is fantastic! This indicates strong demand in the economy. The NNPA improvement from 0.43% to 0.32% shows excellent credit underwriting. Temporary profit blips don't matter when core business is growing so well.
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Michael C
The numbers look solid overall. 4% NII growth and maintaining NIM above 4.5% in current rate environment is commendable. Asset quality improvement is the real highlight here. Kotak continues to be a quality banking stock for Indian investors.

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