Kotak Mah. Bank Q2 FY27 Results (NSE: KOTAKBANK)
Signal: Earnings grew
The read
The earnings inflection is provision-led rather than purely operating: operating profit rose 19.0% YoY to ₹8,350.73 crore and margin expanded to 28.4%, but PAT accelerated 26.4% because provisions fell 48.2% to ₹820.43 crore; this follows PAT recovery from ₹4,468.27 crore in Q2FY26 to ₹5,645.38 crore now, although total income declined 2.1% sequentially.
| Metric | Value | YoY | QoQ |
|---|---|---|---|
| Revenue | ₹29,426.88 Cr | +18.2% | -2.1% |
| EBIT | ₹8,350.73 Cr | +19.0% | |
| Net profit | ₹5,645.38 Cr | +26.4% | |
| EPS | ₹5.68 | +26.5% | |
| EBIT margin | 0% |
P&L walk
Total income increased 18.2% YoY to ₹29,426.88 crore, operating profit grew 19.0% to ₹8,350.73 crore, and PAT rose 26.4% to ₹5,645.38 crore as provisions fell 48.2% to ₹820.43 crore; sequential income declined 2.1% while operating profit was broadly stable.
Segments
Corporate/Wholesale Banking was the largest profit driver at ₹2,430.64 crore, up 22.5% YoY, while Insurance was the fastest-growing material segment with revenue of ₹6,361.33 crore, up 25.4% YoY, and result of ₹321.38 crore, up 143.0% YoY; Other Lending Activities dragged with revenue down 39.5% and result down 4.9% YoY.
Key positives
- Consolidated PAT rose 26.4% YoY to ₹5,645.38 crore, exceeding operating profit growth of 19.0% because provisions declined 48.2% YoY to ₹820.43 crore.
- Deposits increased 23.4% YoY to ₹647,459.43 crore and advances increased 21.9% to ₹645,578.00 crore, supporting balance-sheet scale.
- Corporate/Wholesale Banking profit grew 22.5% YoY to ₹2,430.64 crore, while Insurance result increased 143.0% YoY to ₹321.38 crore.
- Basic EPS rose 26.5% YoY to ₹5.68, closely tracking PAT growth and indicating no material equity dilution in the quarter.
Key concerns
- Total income declined 2.1% QoQ to ₹29,426.88 crore, with other income down 18.3% QoQ to ₹9,571.01 crore.
- H1 operating cash flow was negative at ₹15,569.11 crore versus positive ₹6,119.13 crore in H1FY26, as advances and investments absorbed cash.
- Other Lending Activities revenue fell 39.5% YoY to ₹344.79 crore and segment result fell 4.9% to ₹170.78 crore.
- The 26.4% PAT growth was helped materially by a 48.2% reduction in provisions, making credit-cost normalization an important dependency for sustaining earnings growth.
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