- 25 Jul 2024
- ICICIdirect
KOTAK MAHINDRA BANK Q1 RESULTS 2025: NET PROFIT SOARS BOOSTED BY STAKE SALE IN INSURANCE BUSINESS
KOTAKBANK - 2188 Change: 64.70 (3.05 %)
Kotak Mahindra Bank reported its Q1FY25 numbers on Saturday afternoon, 20th July. On Friday, Kotak Mahindra Bank's share price closed at Rs 1,821.60 per share, down 0.45% on NSE. Let us look at Kotak Bank's result in detail.
About Kotak Mahindra Bank
Kotak Mahindra Bank is a leading private-sector bank, offering a wide range of financial products and services, including banking, insurance, and wealth management. Founded in 1985, it has grown to become one of the country's most prominent banking institutions, with a strong presence in various financial sectors.
Crucial parameters
- PE: 23.40
- 52-week high: Rs 2,063.00
- Market Cap: Rs 3,07,581.06 crore
- ROE: 16.85%
Share price movement
In the last six months, the bank's share price has traded flat. In the last one year, the share price has fallen nearly 2.43%. For the 5-year time frame, the share price has given a sub-par return of only 20%, lower than the benchmark and peers.
How were Kotak Mahindra Bank's June quarter results?
Kotak Mahindra Bank Q1FY25 results details are as below:
Net Profit: The bank has reported a consolidated profit of Rs 7,448 crore, a 81% jump in net profits. The profits have increased from Rs 4,150 crore in the year-ago period. Profit excluding gain on KGI disinvestment (more on this later), the bank reported a profit of Rs 4,435 crore.
Net Interest Income (NII): Kotak Mahindra Bank reported an NII of Rs 6,842 crore for the first quarter of the current financial year. The NII increased by 10% from Rs 6,234 crore reported for the same period of the last financial year. The Net Interest Margins (NIM) reduced to 5.02% in Q1FY25 from 5.57% in Q1FY24.
Asset Quality: Kotak Mahindra Bank's Gross Net Performing Assets (GNPA) for the quarter ended June was 1.39%. It has decreased sharply from the 1.77% reported in the year-ago period and from Q4FY24's GNPA of 1.39%. Net NPA lowered from 0.35% a year ago period to 0.40%. Sequentially, the NNPA has increased marginally from 0.34. In absolute terms, GNPA and NNPA for the quarter ended June stood at Rs 5,477 crore and Rs 1,376 crore, respectively.
Advances and Deposits: The total deposits reported by the bank for the quarter ending June were at Rs 4.36 lakh crore, increased from Rs 3.61 lakh crore from the year-ago period and Rs 4.49 lakh crore in Q4FY24. Net Advances have increased YoY by 19% to Rs 3.90 lakh crore and 4% sequentially. CASA ratio stood at 43.4%, down from 49% in Q1FY24, and 45.5% in Q4FY24.
Unsecured retail advances, including microfinance portfolio, stood at 11.6% as a percentage of net advances compared with 11.8% in the previous quarter. Under customer assets, the retail microfinance portfolio saw a maximum growth of 49% year-on-year to Rs 10,368 crore. It was followed by a growth of 33% to Rs 37,941 crore in the CV/CE segment, followed by 29% in credit cards.
Why was Kotak's profit higher in Q1FY25?
Divestment of stake in Kotak General Insurance to Zurich Insurance Group saw the completion of a landmark deal in the General Insurance sector, with Zurich Insurance Group taking a 70% stake in Kotak General Insurance. The alliance brings together Zurich’s global insurance leadership and scale with Kotak’s local expertise and reach. Post this transaction, KMBL holds a 30% stake in KGI and will continue to act as the corporate agent of KGI for the distribution of general insurance products. The above transaction has resulted in an increase in the consolidated PAT by Rs 3,013 crore and standalone PAT by Rs 2,730 crore.
Update from Subsidiaries
- Kotak Mahindra Prime: It reported an NII of Rs 503 crore, a jump of nearly 15% from the year-ago period. PAT increased from Rs 218 crore in Q1FY24 to Rs 232 crore in Q1FY25. NNPA was stable at 0.9%.
- Kotak Mahindra Life Insurance: The profit after tax (PAT) was reduced to Rs 174 crore for the first quarter of the current financial year. In the same quarter last year, the PAT reported was Rs 193 crore. Total premium increased from Rs 2,639 crore in Q1FY24 to Rs 2,857 crore in Q1FY25.
- Kotak Securities: Total Income from this business increased to Rs 1,298 crore in Q1FY25 from Rs 805 crore in Q1FY24. PAT increased to Rs 400 crore for the quarter ending June. Compared to last year (June quarter), the overall market share has reduced from 10.5% to 10.1%.
- Kotak Mahindra AMC: Average AUM for the June quarter stood at Rs 4.22 lakh crore, an excellent double-digit growth over the same period last year. PAT increased from Rs 106 crore in Q1FY24 to Rs 175 crore in Q1FY25.