Kotak Mahindra Bank is expected to deliver strong September-quarter profit and loan growth, but investors will focus on whether higher deposit costs and FCNR(B) inflows begin to weigh on margins.
Kotak Mahindra Bank is expected to post a strong rise in September-quarter profit, helped by solid loan growth and better operating performance, even as investors focus on whether margin pressure from deposit costs and Foreign Currency Non-Resident, or FCNR(B), inflows begins to build. NDTV Profit estimates standalone net profit will climb 26.9% from a year earlier to Rs 4,128 crore, up from Rs 3,253 crore in the same quarter last year.
Net interest income is projected to increase 13.38% year on year to Rs 8,289 crore, while pre-provision operating profit is seen rising 18.11% to Rs 6,222 crore. The comparison base is relatively weak, however, after Moneycontrol reported that the bank’s profit fell 2.7% year on year in the year-earlier quarter, even as net interest income grew and margins held at 4.54%. Analysts are watching whether Kotak can convert faster credit growth into stronger earnings without sacrificing pricing discipline.
A key question for the market will be how the bank uses the FCNR(B) funds it has raised. Business Standard said the broader banking sector is likely to face some squeeze on net interest margins from those deposits, even as net profit grows on lower credit costs and steady interest income. NDTV Profit said Kotak’s net interest margin is expected to stay flat quarter on quarter at 4.53%, but that the bank’s asset mix, the share of higher-yielding loans and the deployment of these funds will be closely scrutinised. Return on assets is also expected to remain healthy, though that will depend on the balance between lending growth, funding costs and provisions.
Asset quality is expected to remain stable, with gross non-performing assets forecast at 1.15% and net non-performing assets at 0.27%. Investors will also look for signs of stress moderation in commercial vehicle and tractor lending, as well as trends in the bank’s current account and savings account ratio, gold loans and the possible impact of El Niño on rural activity. Kotak Neo said the bank’s shares were lower on October 23, 2026, ahead of the results announcement, as investors positioned for a report that is likely to show robust year-on-year growth, but with margins and credit quality still central to the outlook.
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