Kotak Mahindra Bank Q4 result: Here's what you can expect?

The share price of Kotak Mahindra Bank have soared by nearly 2% ahead of the bank's fourth quarter ended March 31, 2017 result announcement.

At 1223 hours, shares of Kotak Mahindra Bank was trading at Rs 913.70 a piece on BSE, up by Rs 13 or 1.48%.

On Wednesday, investors ahead of Q4 boosted the stocks of Kotak so much that it crossed a 52-week high of Rs 919.75 per piece.

In previous quarter (Q3FY17), Kotak saw nearly 39% jump in net profit to Rs 880 crore as against Rs 635 crore in the similar period of last year.

Standalone net interest income (NII) stood at Rs 2,050.30 crore which grew by 16.1% from Rs.1,766.21 crore last year.

Commenting on Q3 performance, Dipak Gupta, joint managing director, Kotak Mahindra Bank said, “The positive effects of demonetization are on savings and current account growth, 5% more growth than the usual…asset growth has been muted,”

Meanwhile gross non-performing assets (GNPA) were 2.42% in Q3FY17, compared with 2.49% in Q2FY17 and 2.30% Q3FY16. 

Here's how you can expect Kotak's Q4FY17 to be like.

Kotak's Q4 growth is expected to be marginal on quarter-on-quarter (QoQ) basis but would good in comparison with year-on-year (YoY) basis. 

Nilesh Parikh, Kunal Shah and Prakhar Agarwal of Edelweiss Financial Services said, "Growth momentum has been softer post integration, we expect trend to continue on that. Asset growth of combined entity will likely be stable; capital market related businesses to maintain momentum."

On standalone basis,  analysts at Motilal Oswal expects loan and deposit of Kotak this Q4 to be at 15% and 12.5% respectively. 

However, net interest margin (NIM) is likely to decline by 5 basis point QoQ, but improve 16 basis point YoY. Overall, we expect NII growth of 13% YoY. CASA retention would be a key driver of NII and NIM, as per Motilal. 

As for asset quality, Motilal just like Edelweiss to remain stable with GNPA less than 2.5% and Net NPA at 1%, led by high provision coverage ratio.

Furthermore, Motilal said, "With strong digital initiatives, fast-paced customer acquisition and merger synergies from eIVBL, fee income would be a key growth driver for the bank. We factor in fee income growth of 20% in 4Q and expect an improving trend in the coming quarters."

Hence, Motilal expects Kotak's net profit to be at Rs 8,87.8 crore rising by 27.59% yoy and 0.91% qoq. While NII is seen at Rs 2,100.8 crore growing by 13.11% yoy and 2.46% qoq. 

Consolidated net profit is expect at Rs 1,271.6 crore, increasing by 20.55% yoy and 0.37% qoq.