Q1 preview: KMB can continue to see traction in both loan, deposit growth

The strong growth in NII is expected to be driven by the bank’s healthy loan growth and rising interest rates. The bank’s loan book is expected to grow by 15-16% YoY in Q1 FY24, while its net interest margin (NIM) is expected to remain stable at around 4%.

The PAT is also expected to grow strongly, driven by the robust NII and lower provisioning requirements. The bank’s provisioning is expected to decline to around 1% of its advances in Q1 FY24, from 1.2% in the previous quarter.

Overall, analysts expect Kotak Mahindra Bank to report strong financial results for Q1 FY24. The bank’s strong performance is likely to be driven by its healthy loan growth, rising interest rates, and lower provisioning requirements.

Here are some of the key factors that are expected to drive Kotak Mahindra Bank’s Q1 FY24 results:

Healthy loan growth: The bank’s loan book is expected to grow by 15-16% YoY in Q1 FY24, led by strong growth in its retail and corporate loan portfolios.

Rising interest rates: The bank’s NIM is expected to remain stable at around 4% in Q1 FY24, despite the recent increase in interest rates. This is because the bank’s deposit base is largely composed of low-cost CASA deposits.

Lower provisioning requirements: The bank’s provisioning is expected to decline to around 1% of its advances in Q1 FY24, from 1.2% in the previous quarter. This is due to the fact that the bank’s asset quality has improved in recent quarters.

The stock price of Kotak Mahindra Bank (KMB) trades at 1967.40 rupees on July 21, 2023, up 0.54% from the previous day’s close of 1957 rupees. The stock traded in a range of 1956-1987 rupees during the day.

The positive movement in KMB’s stock price was likely due to a combination of factors, including the bank’s strong financial results for the first quarter of fiscal year 2024 (Q1 FY24), which were announced on July 21.

Other factors that may have contributed to the positive movement in KMB’s stock price include the recent increase in interest rates, which is likely to benefit the bank’s net interest income (NII). Additionally, the bank’s asset quality has improved in recent quarters, which is also positive for the stock.

Overall, the positive movement in KMB’s stock price on July 21 is a positive sign for the bank and its investors. The stock is likely to continue to perform well in the near term, supported by the bank’s strong financial performance and improving asset quality.

Updated: 21 Jul 2023, 03:31 PM IST