Kotak Mahindra Bank shares plunge over 6% after muted Q1 show. Should you sell now?
ADVERTISEMENT The dip in net profit comes despite a healthy rise in the bank's net interest income (NII), which grew 6% YoY to Rs 7,259 crore in Q1FY26 from Rs 6,842 crore in Q1FY25.
The bank clarified that the reported profit was adjusted for a one-time gain from the sale of its general insurance business. If this gain is included, the unadjusted net profit for the year-ago quarter was significantly higher at Rs 6,250 crore. This quarter's earnings also exclude any gains from the divestment of Kotak General Insurance (KGI), which ceased to be a wholly owned subsidiary on June 18, 2024. Following the divestment, KGI has become an associate of the bank.
Despite the decline in PAT, Kotak Mahindra Bank witnessed robust growth in its lending and deposit base during the quarter.Average advances for Q1FY26 grew 14% year-on-year, with net advances rising to Rs 4,44,823 crore as of June 30, 2025, compared to Rs 3,89,957 crore a year earlier. On the deposit front, the bank reported a 13% YoY increase in average total deposits, which grew to Rs 4,91,998 crore in Q1FY26 from Rs 4,35,603 crore in the same quarter last year. After the bank's Q1 results, domestic brokerage firm Antique has maintained a 'Buy' rating on Kotak Mahindra Bank but has revised its target price downward to Rs 2,440 from Rs 2,540.
ADVERTISEMENT
Also read: NSDL IPO: Issue opens on July 30, here's what you need to know about GMP, issue details
Antique said that the earnings miss for the quarter was attributed to a higher-than-expected decline in margins and elevated credit costs. While loan growth was led by the corporate and secured retail segments, unsecured lending remained weak. Margins came under pressure due to rapid External Benchmark Lending Rate (EBLR) repricing and a shrinking unsecured mix.
ADVERTISEMENT The bank also saw a deterioration in asset quality within the microfinance (MFI) and retail commercial vehicle (CV) segments. However, a rebound in unsecured credit is expected in FY26/27, which could support future performance.Due to margin and credit cost concerns, Antique has lowered its FY26/27 earnings estimates by 6% and 3%, respectively. Nonetheless, the brokerage finds valuations to be reasonable at 2.2 times one-year forward price-to-book, with return on assets (RoA) at 2.2% and return on equity (RoE) projected at 14% for FY26–28.
ADVERTISEMENT On Friday, the shares of Kotak Mahindra Bank closed
(Disclaimer: Recommendations, suggestions, views and opinions given by the experts are their own. These do not represent the views of The Economic Times)
(You can now subscribe to our ETMarkets WhatsApp channel)
Try Our AI Features
Explore what Daily8 AI can do for you:
Comments
No comments yet...
Related Articles
Hans India
7 minutes ago
- Hans India
Cops arrest man in Rs 1.98 crore online trading fraud
Hyderabad: The Hyderabad Cybercrimes police have apprehended a 50-year-old man from Uttar Pradesh involved in a sophisticated online trading fraud, where he allegedly cheated a victim out of Rs 1.98 crore. Police arrested Aman Pal Singh. According to police, a complaint was received from a Hyderabad resident who stated that cyber fraudsters contacted him via Facebook. While browsing Facebook, the victim encountered a link related to alleged employees and senior advisors of 'Barclays Wealth Management' and 'UP Asset Allocation Z06.' These individuals invited the victim to join their purported companies, 'Private Wealth Management' and 'UPSTOX,' claiming they offered high-quality stock recommendations with significant profit potential. The victim was subsequently added to a WhatsApp group, where scammers guided him to invest in specific stocks, IPOs, and OTC (Over-The-Counter) stocks, which the victim followed in good faith. The invested amount, along with false profits, was displayed on a fake website. However, the withdrawal feature was later disabled. When the victim attempted to withdraw funds, the fraudsters demanded additional payments under the pretext of taxation and currency conversion charges, assuring him that only after these charges were paid would the invested amount be released. The victim ultimately lost Rs 1,98,25,000. The cybercrime police stated that Aman Pal Singh procures current bank accounts from his agents in Uttar Pradesh and New Delhi, which are then used in investment frauds. After these bank accounts are utilised in fraudulent activities, he would assemble with account holders and account suppliers at various hotels in Greater Noida, New Delhi, to disburse their share of the money as commission, based on the bank statements.
Time of India
7 minutes ago
- Time of India
Lenskart's Rs 8,000 crore IPO; IT's GCC threat
Next Lenskart's Rs 8,000 crore IPO; IT's GCC threat Want this newsletter delivered to your inbox? Also in the letter: Lenskart files for Rs 8,000 crore IPO; founder Peyush Bansal boosts stake IPO snapshot: Fresh issue: Rs 2,150 crore. Rs 2,150 crore. Offer for sale: 132.2 million shares from existing investors, including SoftBank, Temasek, Kedaara Capital and Alpha Wave Global. 132.2 million shares from existing investors, including SoftBank, Temasek, Kedaara Capital and Alpha Wave Global. Cofounders Peyush Bansal, Neha Bansal, Amit Chaudhary and Sumeet Kapahi are together selling 31.8 million shares. Founder move: He will also offload 20.5 million shares in the IPO, potentially netting Rs 700–750 crore. Founder stake top-ups ahead of IPOs have become a familiar trend in India's startup ecosystem, from Zomato to Swiggy and Freshworks. By the numbers: FY25 revenue: Rs 6,625 crore, up 22% year-on-year. Rs 6,625 crore, up 22% year-on-year. Net profit: Rs 297 crore vs. Rs 10 crore loss in FY24. Rs 297 crore vs. Rs 10 crore loss in FY24. International revenue: Rs 2,638 crore, over 40% of total. Rs 2,638 crore, over 40% of total. Store footprint: 2,700+ globally. Between the lines: Its omnichannel model now spans Asia and the Middle East, with the 2022 acquisition of Japan's OwnDays powering its international surge. FY25 was the first year the deal's full impact was reflected in the books. The company is also expanding in Europe, with its Singapore arm set to acquire 80% of Spanish brand Meller for Rs 407 crore, a move aimed at Gen Z consumers. What to watch: Also Read: Rapid GCC growth reshapes India's outsourcing industry Driving the change: Also Read: Setting context: What this means: Number-wise: The IT services sector employed around 5.4 million professionals as of FY24. GCCs employed nearly 1.9 million people, with net additions of 90,000 in FY24 and over 100,000 in FY25. Some global banks, such as JP Morgan Chase and Wells Fargo, now employ more people in their Indian GCCs than a mid-tier IT firm. Sponsor ETtech Top 5 & Morning Dispatch! Why it matters: The opportunity: Reach a highly engaged audience of decision-makers. Boost your brand's visibility among the tech-savvy community. Custom sponsorship options to align with your brand's goals. What's next: Nasscom meet warns of workforce rationalisation as IT faces big reset Driving the news: What's next: Also Read: Keeping Count Other Top Stories By Our Reporters Swiggy adds about 2,000 employees in FY25: W Health's new fund: Insolvency petitions against Blusmart: Zepto's secondary deal: Global Picks We Are Reading Happy Wednesday! Lenskart has filed its draft IPO papers for a Rs 8,000-crore public offering. This and more in today's ETtech Morning Dispatch.■ Nasscom's warning■ Inside Swiggy's annual report■ W Health Ventures' new fundPeyush Bansal, CEO, LenskartEyewear retailer Lenskart has kicked off one of the year's most anticipated new-age listings, filing its draft red herring prospectus (DRHP) with market regulator Securities and Exchange Board of India (Sebi) for an initial public offering (IPO) of up to Rs 8,000 Bansal recently bought a 2.5% stake in the company for Rs 222 crore from early investors at a $1 billion valuation, even as Lenskart now eyes a listing at Rs 70,000–75,000 ($8–9 billion) eyes will now be on how public markets price a profitable, global-facing Indian startup betting on vision, both literally and booming global capability centres (GCC) are quietly reshaping the country's tech landscape . Their meteoric rise is starting to squeeze the traditional, people-heavy outsourcing model that has powered India's services exports for over three companies (MNCs) are increasingly building or expanding GCCs in India to handle critical technology work in-house. Instead of outsourcing to Indian IT giants, they are insourcing core functions. The trend is slowing third-party demand and fuelling job cuts across the sector.A recent HFS survey of 200-plus enterprises shows the scale of the pivot. Over 65% of companies expect to shift at least 10% FTEs (full-time equivalent, which measures the work based on employees' work hours) from vendors to their own impact is already visible. Tata Consultancy Services (TCS), India's largest software exporter, announced it would trim 12,000 jobs this year, around 2% of its workforce, rattling the say the surge of GCCs is biting hardest in banking, financial services, and insurance (BFSI), where clients have aggressively scaled up Indian Top 5 and Morning Dispatch are must-reads for India's tech and business leaders, including startup founders, investors, policy makers, industry insiders and Reach out to us at spotlightpartner@ to explore sponsorship after TCS announced its mass layoffs s , IT industry body Nasscom said it expects some job cuts soon in the wider $283-billion technology industry body, which convened a meeting in Bengaluru on Tuesday, stated that these layoffs are a result of the shift towards product-oriented delivery models and the increasing demand from global clients for greater agility, speed, and said that the technology sector is experiencing a structural shift as artificial intelligence (AI) and automation become integral to business operations, affecting both service delivery and workforce legacy roles are still on the chopping block as firms relocate talent and trim middle management. The message is blunt: workforce strategy will follow business needs, not HR and grocery delivery company Swiggy added around 2,000 employees in fiscal 2025, increasing its total workforce to 7,431 as of March 31 this year, according to its annual report released on venture capital firm W Health Ventures aims to raise $70 million , or approximately Rs 610 crore, for its second India-focused fund to back healthcare startups in the Ahmedabad bench of the National Company Law Tribunal has admitted a petition seeking to initiate bankruptcy proceedings against ride-hailing startup BluSmart non-banking financial company (NBFC) Elcid Investments is investing Rs 7.5 crore in quick commerce company Zepto, it said in a stock exchange filing.■ Ex-Apple engineer brings Silicon Valley tactics to European defence tech ( FT ■ Meta is going to let job candidates use AI during coding tests ( Wired ■ Inside the collapse of Was it even an AI company? ( Rest of World
Time of India
7 minutes ago
- Time of India
Odisha demands Rs 3,069 crore from Centre under RDSS
Bhubaneswar: The Odisha government on Tuesday urged the Centre for early sanction of Rs 3,069 crore under the Revamped Distribution Sector Scheme (RDSS). Deputy Chief Minister K V Singh Deo has raised this demand before Union Power Minister Manohar Lal during his meeting in New Delhi, an official statement said. The Centre had launched the RDSS with an aim to reduce the aggregate technical and commercial (AT&C) losses to pan-India levels. Under the scheme, financial assistance to power distribution companies is provided for upgradation of the distribution infrastructure and for prepaid smart consumer metering and system metering based on meeting pre-qualifying criteria and achieving basic minimum benchmark in reforms, officials said. As Odisha frequently faces natural disasters like cyclones and floods, the Coalition for Disaster Resilient Infrastructure (CDRI) has proposed the creation of disaster-resilient power infrastructure with selective underground cabling, especially 30 km from the coastline, the statement said. Therefore, Odisha urgently needs central financial assistance for disaster-resilient power infrastructure, Singh Deo said. Considering the rising demand for power, he urged Lal for the allocation of 800 megawatt (MW) power from NLC Talabira Phase-II project in addition to the 400 MW already allocated in Phase-I to Odisha. It would bring the total share to 1,200 MW from 3,200 MW total project capacity, the statement said.
