About the Bank:
Kotak Mahindra Group is one of India's leading financial services conglomerates was established in 1985. In February 2003, Kotak Mahindra Finance Ltd. (KMFL), the Group's flagship company, received a banking license from the Reserve Bank of India (RBI), becoming the first non-banking finance company in India to convert into a bank - Kotak Mahindra Bank Ltd (KMBL).
QoQ & YoY Performance:
Kotak Mahindra Bank is the top five private-sector banks in India, which has declared the results for its last quarter of the fiscal year ending March 2020.
- Net Interest Income: NII is the difference between interest earned and interest expended that is the key factor for bank’s financial health status is increased by 4.31% QoQ while on YoY basis, there is an increase of 16.49% growth stating that interest earned is grown more than interest expanded.
- Net Profit after Tax: On QoQ basis, the bank has posted 16.21% down PAT due to rising provisions by Covid-19 while on YoY basis contracted to 4.24%.
- Provisions and Contingencies: Bank's provisions and contingencies are landed to Rs 1,262.19 crores, jumped 538.73% YoY.
- Net NPA: Net NPA ratios are fallen by 19.54% QoQ while on a yearly basis was unchanged.
- Dividend Payout: In accordance with RBI Circular, dated April 17, 2020, the Board of Directors of Kotak Bank has not recommended any dividend for FY20.
As per Lokesh Sethia, SEBI Registered Research Analyst, the stock was closed at Rs. 1,186.50 per share, up by 2.35%. Asset quality has improved of the bank during the quarter with gross non-performing assets (NPA) falling 21 basis points sequentially to 2.25% and net NPA declining 18 basis points QoQ to 0.71%. Hence, we recommend it to ‘BUY’ with a target of Rs. 1,363 per share.