- 05 May 2025
- ICICIdirect Research
KOTAK MAHINDRA BANK REPORTED A MIXED SET OF NUMBERS IN Q4FY25
News: Kotak Mahindra Bank reported a mixed set of numbers in Q4FY25. Business growth moderated with advances rising 13.5% YoY, despite acquisition of portfolio from Standard Chartered. Deposit accretion was up 11.2% YoY, driven by term deposits (Avg) growing at 25% YoY, while CASA ratio held steady at 43%. NIM improved sequentially to 4.97% (vs. 4.93% in Q3FY25) aided by SA rate cuts and strong CA balances. Other income grew 21% QoQ, led by distribution fees, though muted on a full-year basis due to embargo impact. Opex spiked QoQ on brand campaign costs and actuarial provisioning. Credit costs moderated to 64 bps in Q4 (vs 68 bps in Q3FY25), with signs of stabilization in personal loans and credit cards although MFI stress remained elevated. PAT for the bank stood at ₹3,552 crore.
View: Lifting of embargo and stabilization in stress in credit card segment is expected to drive credit growth and enable margins to remain steady. Liabilities franchise is to gain strength with focus back on 811 acquisition. Opex trend to remain steady and credit cost is seen to remain higher owing to continued pressure in MFI segment. While the bank is relatively better placed among peers in terms of growth and profitability, current valuation limit upside.
Impact: Neutral