{"id":155169,"date":"2023-10-23T07:19:54","date_gmt":"2023-10-23T11:19:54","guid":{"rendered":"https:\/\/44.250.171.167\/?p=155169"},"modified":"2023-10-23T07:19:55","modified_gmt":"2023-10-23T11:19:55","slug":"kotak-mahindra-bank-ltd-q2-fy24-earnings-conference-call-insights","status":"publish","type":"post","link":"https:\/\/alphastreet.com\/india\/kotak-mahindra-bank-ltd-q2-fy24-earnings-conference-call-insights\/","title":{"rendered":"Kotak Mahindra Bank Ltd Q2 FY24 Earnings Conference Call Insights"},"content":{"rendered":"<p><strong>Key highlights from Kotak Mahindra Bank Ltd (KOTAKBANK) Q2 FY24 Earnings Concall<\/strong><\/p>\n<ul>\n<li><strong>Q2 Results<\/strong>\n<ul>\n<li>Net profit increased 24% year-over-year to INR4,461 crores.<\/li>\n<li>NIM decreased to 5.22% from 5.34% last quarter due to certain one-offs of about 14-15 bps.<\/li>\n<li>Advances grew 21% year-over-year; growth seen across most retail segments.<\/li>\n<li>Asset quality improved with GNPA ratio declining to 1.78% from 2.08% last year.<\/li>\n<li>Bank has healthy capital adequacy ratio of 21.7% with CET1 at 20.6%.<\/li>\n<li>CASA ratio dropped to 53.6% in 2Q, a decrease of 70 bps, as customers shifted from savings to term deposits for better interest rates.<\/li>\n<\/ul>\n<\/li>\n<li><strong>Macroeconomic Outlook<\/strong>\n<ul>\n<li>India growth story remains positive but global geopolitics warrant caution.<\/li>\n<li>Inflation and resulting rate hikes will keep pressure on growth.<\/li>\n<li>Tight liquidity likely to continue &#8211; growth versus NIM tradeoff better than growth versus credit growth currently.<\/li>\n<\/ul>\n<\/li>\n<li><strong>Kotak Securities Update<\/strong>\n<ul>\n<li>Total income increased to INR962 crores versus INR776 crores last year.<\/li>\n<li>Net profit grew 45% year-over-year to INR324 crores.<\/li>\n<li>Combined market share increased from 5% to 8.8%.<\/li>\n<li>80% of futures and options volume is through Neo platform.<\/li>\n<li>Total average AUM grew 18% Y-o-Y to INR3.36 trillion.<\/li>\n<li>SIP inflows grew 22% Y-o-Y to INR10.2 billion in September.<\/li>\n<li>Assets under management in mutual fund business grew 28% year-over-year.<\/li>\n<\/ul>\n<\/li>\n<li><strong>Wholesale Banking<\/strong>\n<ul>\n<li>Reasonable credit demand from larger corporates and SMEs.<\/li>\n<li>Focus on loans over low-yielding bonds in credit substitute book.<\/li>\n<li>SME growth moderated due to competitive pressures affecting risk-reward metrics.<\/li>\n<li>Overall corporate book remains healthy with negligible credit costs<\/li>\n<\/ul>\n<\/li>\n<li><strong>Commercial Banking Performance<\/strong>\n<ul>\n<li>Commercial vehicle industry saw 7% Y-o-Y volume growth in Q2 but muted growth of 2% in H1.<\/li>\n<li>Passenger vehicle segment continued strong growth of 33% Y-o-Y.<\/li>\n<li>Tractor industry wholesale was down 6.6% Y-o-Y in Q2 due to uneven rainfall.<\/li>\n<li>Microfinance business continued momentum with 65% Y-o-Y growth in disbursements.<\/li>\n<li>Agri SME growth was muted due to commodity prices and demand<\/li>\n<\/ul>\n<\/li>\n<li><strong>Kotak Alternate Assets Growth<\/strong>\n<ul>\n<li>Building platform across 6 asset classes, raising capital globally.<\/li>\n<li>Data center fund made $72 million investment in Sify Infinit Spaces.<\/li>\n<li>Raised $109 million for private credit fund.<\/li>\n<\/ul>\n<\/li>\n<li><strong>Kotak Prime and Kotak Life Insurance Business Performance<\/strong>\n<ul>\n<li>Kotak Prime Q2 PAT at INR208 crores, same as Q1.<\/li>\n<li>Demand slow at lower end cars, but SUV and premium segment growing.<\/li>\n<li>Kotak Life Insurance Q2 PAT muted at INR247 crores.<\/li>\n<li>Individual regular premium business saw slow growth.<\/li>\n<\/ul>\n<\/li>\n<li><strong>NIM Declines And Outlook<\/strong>\n<ul>\n<li>NIM declined 15 bps sequentially due to CRR impact, higher liquidity buffer, short-term inflows invested at lower yields. These are unlikely to repeat at same levels.<\/li>\n<li>Yield on advances stable, cost of deposits increased by 20 bps.<\/li>\n<li>Repricing of deposits largely complete barring any external shocks. Expect maybe 1 more quarter of repricing impact.<\/li>\n<\/ul>\n<\/li>\n<li><strong>Slippages And Recoveries<\/strong>\n<ul>\n<li>Slippages at INR1300 crore, dominated by retail segment.<\/li>\n<li>Total recoveries and upgrades at INR900 crore including the INR300 crore.<\/li>\n<li>Recovery and upgrades about 60-65% of slippages, in line with trends in retail portfolio.<\/li>\n<\/ul>\n<\/li>\n<li><strong>Growth Trends Across Segments<\/strong>\n<ul>\n<li>Growth driven more by advances vs credit substitutes now. Mix changing favorably.<\/li>\n<li>Corporate growth is increasing, led by asset growth and profitability, not deposit growth or size.<\/li>\n<li>Home loans are slowing due to pricing\/spread compression, but combined growth with LAP is strong.<\/li>\n<li>Product mix management continues based on optimizing growth and profitability.<\/li>\n<\/ul>\n<\/li>\n<li><strong>Margin Outlook<\/strong>\n<ul>\n<li>Sharp fall in margins this quarter was partly due to one-off yield drag of 14-15 bps which is unlikely to repeat.<\/li>\n<li>70% of loan book is floating rate linked to repo or MCLR so limited upside from repricing.<\/li>\n<li>Bank aims to remain highest NIM in industry; sharpness of margin decline not likely to continue.<\/li>\n<\/ul>\n<\/li>\n<\/ul>\n","protected":false},"excerpt":{"rendered":"<p>Key highlights from Kotak Mahindra Bank Ltd (KOTAKBANK) Q2 FY24 Earnings Concall Q2 Results Net profit increased 24% year-over-year to INR4,461 crores. NIM decreased to 5.22% from 5.34% last quarter due to certain one-offs of about 14-15 bps. Advances grew 21% year-over-year; growth seen across most retail segments. Asset quality improved with GNPA ratio declining [&hellip;]<\/p>\n","protected":false},"author":1767,"featured_media":154818,"comment_status":"open","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"jetpack_post_was_ever_published":false,"footnotes":"","jetpack_publicize_message":"","jetpack_publicize_feature_enabled":true,"jetpack_social_post_already_shared":true,"jetpack_social_options":{"image_generator_settings":{"template":"highway","default_image_id":0,"font":"","enabled":false},"version":2}},"categories":[9825,392,1],"tags":[151,10169,1792],"class_list":["post-155169","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-earnings-call-highlights","category-earnings","category-finance-stocks","tag-banking","tag-earnings","tag-financial-services"],"jetpack_publicize_connections":[],"jetpack_featured_media_url":"https:\/\/alphastreet.com\/india\/wp-content\/uploads\/2023\/10\/CC_Image_1.jpg","jetpack_likes_enabled":false,"jetpack-related-posts":[{"id":135137,"url":"https:\/\/alphastreet.com\/india\/kotak-mahindra-bank-ltd-q2-fy23-earnings-conference-call-insights\/","url_meta":{"origin":155169,"position":0},"title":"Kotak Mahindra Bank Ltd Q2 FY23 Earnings Conference Call Insights","author":"Praveen","date":"October 26, 2022","format":false,"excerpt":"https:\/\/youtu.be\/z_loN5r8KSo Key highlights from Kotak Mahindra Bank Ltd (KOTAKBANK) Q2 FY23 Earnings Concall \u00a0Q&A Highlights: [00:38:49] Manish Shukla of Axis Capital asked about credit substitutes growing and its nature in terms of duration. K.V.S. Manian Whole-Time Director said the bank this year has built a relatively less than 1 year\u2026","rel":"","context":"In &quot;Concall Highlights&quot;","block_context":{"text":"Concall Highlights","link":"https:\/\/alphastreet.com\/india\/category\/earnings-call-highlights\/"},"img":{"alt_text":"","src":"https:\/\/i0.wp.com\/alphastreet.com\/india\/wp-content\/uploads\/2021\/11\/Earnings-Coverage.jpg?resize=350%2C200&ssl=1","width":350,"height":200,"srcset":"https:\/\/i0.wp.com\/alphastreet.com\/india\/wp-content\/uploads\/2021\/11\/Earnings-Coverage.jpg?resize=350%2C200&ssl=1 1x, https:\/\/i0.wp.com\/alphastreet.com\/india\/wp-content\/uploads\/2021\/11\/Earnings-Coverage.jpg?resize=525%2C300&ssl=1 1.5x"},"classes":[]},{"id":128869,"url":"https:\/\/alphastreet.com\/india\/kotak-mahindra-bank-ltd-q4-fy22-earnings-conference-call-insights\/","url_meta":{"origin":155169,"position":1},"title":"Kotak Mahindra Bank Ltd Q4 FY22 Earnings Conference Call Insights","author":"Praveen","date":"May 5, 2022","format":false,"excerpt":"https:\/\/youtu.be\/hbks-LEQ254 Key highlights from Kotak Mahindra Bank Ltd (KOTAKBANK) Q4 FY22 Earnings Concall Management Update: KOTAKBANK said that the bank is now seeing a sharp drop in the slippage ratio in terms of the new bad loans. For 4Q22, the slippage on an annualized basis is down to 1.08%, which\u2026","rel":"","context":"In &quot;Concall Highlights&quot;","block_context":{"text":"Concall Highlights","link":"https:\/\/alphastreet.com\/india\/category\/earnings-call-highlights\/"},"img":{"alt_text":"","src":"https:\/\/i0.wp.com\/alphastreet.com\/india\/wp-content\/uploads\/2021\/11\/Earnings-Coverage.jpg?resize=350%2C200&ssl=1","width":350,"height":200,"srcset":"https:\/\/i0.wp.com\/alphastreet.com\/india\/wp-content\/uploads\/2021\/11\/Earnings-Coverage.jpg?resize=350%2C200&ssl=1 1x, https:\/\/i0.wp.com\/alphastreet.com\/india\/wp-content\/uploads\/2021\/11\/Earnings-Coverage.jpg?resize=525%2C300&ssl=1 1.5x"},"classes":[]},{"id":149653,"url":"https:\/\/alphastreet.com\/india\/kotak-mahindra-bank-ltd-q1-fy24-51-rise-in-profits\/","url_meta":{"origin":155169,"position":2},"title":"Kotak Mahindra Bank Ltd Q1 FY24; 51% rise in Profits","author":"Hardik Bhandare","date":"July 24, 2023","format":false,"excerpt":"Kotak Mahindra Bank is a diversified financial services group providing a wide range of banking and financial services including Retail Banking, Treasury and Corporate Banking, Investment Banking, Stock Broking, Vehicle Finance, Advisory services, Asset Management, Life Insurance and General Insurance. Financial Results: Kotak Mahindra Bank Ltd reported Revenues for Q1FY24\u2026","rel":"","context":"In &quot;AlphaGraphs&quot;","block_context":{"text":"AlphaGraphs","link":"https:\/\/alphastreet.com\/india\/category\/infographics\/"},"img":{"alt_text":"","src":"https:\/\/i0.wp.com\/alphastreet.com\/india\/wp-content\/uploads\/2023\/07\/image-148.png?resize=350%2C200&ssl=1","width":350,"height":200,"srcset":"https:\/\/i0.wp.com\/alphastreet.com\/india\/wp-content\/uploads\/2023\/07\/image-148.png?resize=350%2C200&ssl=1 1x, https:\/\/i0.wp.com\/alphastreet.com\/india\/wp-content\/uploads\/2023\/07\/image-148.png?resize=525%2C300&ssl=1 1.5x, https:\/\/i0.wp.com\/alphastreet.com\/india\/wp-content\/uploads\/2023\/07\/image-148.png?resize=700%2C400&ssl=1 2x, https:\/\/i0.wp.com\/alphastreet.com\/india\/wp-content\/uploads\/2023\/07\/image-148.png?resize=1050%2C600&ssl=1 3x, https:\/\/i0.wp.com\/alphastreet.com\/india\/wp-content\/uploads\/2023\/07\/image-148.png?resize=1400%2C800&ssl=1 4x"},"classes":[]},{"id":155387,"url":"https:\/\/alphastreet.com\/india\/tech-mahindra-limited-q2-fy24-earnings-conference-call-insights\/","url_meta":{"origin":155169,"position":3},"title":"Tech Mahindra Limited Q2 FY24 Earnings Conference Call Insights","author":"Praveen","date":"October 27, 2023","format":false,"excerpt":"Key highlights from Tech Mahindra Limited (TECHM) Q2 FY24 Earnings Concall Financial Performance Revenue declined 2.4% in constant currency vs. last quarter due to market pressures and rationalization of non-core businesses. 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