Kotak Mahindra Bank Limited is an Indian banking and financial services company which has their headquarters in Mumbai. They provide banking products and financial services for corporate and retail customers in the terms of personal finance, investment banking, life insurance, and wealth management. The bank is India’s third largest private sector bank by market capitalisation. As of February 2021, the bank has 1600 branches and 2519 ATMs.
Quarterly Growth Walkthrough
Private sector lender Kotak Mahindra Bank on reported a 20 percent growth in consolidated net profit after tax and a 17 percent growth in net interest income for the quarter ended September 30, 2022.
The consolidated profit increased to Rs 3,608 crore during the quarter, up from Rs 2,989 crore in the corresponding period of the last fiscal year.
Net interest income which is the difference between interest earned and interest spent has risen to Rs 5,100 crore from Rs 4,020 crore in the year-ago period, with the net interest margin increasing by 72 basis points year on year to 5.17 percent for Q2FY23.
Kotak Mahindra has seen a 25 percent YoY growth in customer assets, which includes advances and credit substitutes, at Rs 3.21 lakh crore as of September 2022, with advances growing over 25 percent to Rs 2.94 lakh crore in the same period. Deposits rose by 11.5 percent to Rs 3.25 lakh crore YoY.
The financing profit which comes out after the summation of revenue, interest and expenses has come in negative. Quite similar to ICICI Bank. However, the real profit of Kotak bank comes from Other Income, which was exactly the same case in ICICI Bank. Apart from HDFC Bank which has positive financing profit, these major 2 banks are failing at the financing profit in terms of positivity, but the banks can churn profits through the Other Income (non-interest income) section which seems to be very shady business of our major Indian banks.
Non-interest income (other income) for the quarter has risen by 5 percent to Rs 7,519 crore supported by fee and services segment (largely general banking fees), which has contributed its majority to other income.
The asset quality performance has improved significantly in the September quarter, with gross non-performing assets (NPAs) as a percentage of gross advances lowering down by 16 bps sequentially to 2.08 percent and the net NPA declined 7 bps QoQ to 0.55 percent.
The bank held total provisions of Rs 6,500 crore including Covid-19 provision of Rs 438 crore and restructuring provision of Rs 207 crore, maintaining higher than the regulatory requirement at 10 percent of the restructured book.
Technical Analysis
Kotak Bank stock price is struggling at the Rs 2000 mark where the stock faces heavy resistance and is pushed down. Operators are manipulating the stock under the Rs 2000 mark as there has been heavy Open Interest present on the call option of CE 2000 on every expiry since the beginning November 2020.
The stock seems to be trading in a range which can be favourable for directional neutral trading. You can learn to trade the art of mastering options through the Advance Options Course which commences on 17th December 2022.
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