Kotak Bank shares fall ahead of Q2 results; Here's what to expect

Shares of Kotak Mahindra Bank are trading lower on Friday, October 24, ahead of the private sector lender's September quarter earnings announcement. The bank is scheduled to announce its July-September quarter (Q2FY26) results on Saturday, October 24.

Analysts expect a mixed performance, with healthy growth in net interest income (NII) and stable operational metrics, though profit after tax (PAT) may see a marginal decline.

NII is likely to rise around 4% year-on-year, led by steady loan growth. However, net interest margins (NIMs) are expected to contract by about 9 basis points sequentially to 4.56%, as the impact of interest reversals remains limited due to better asset quality.

Kotak Mahindra Bank
Standalone ₹cr	2QFY25	1QFY26	2QFY26F	QoQ	YoY
NII	7,020	7,259	7,294	0%	4%
NIMs likely to decline 9bp QoQ to 4.56% vs 4.65%
Other Inc	2,684	3,080	2,890	-6%	8%
PPOP	5,099	5,564	5,337	-4%	5%
Provisions	660	1,208	983	-19%	49%
Reported Credit cost likely to decline 20bp QoQ to ~0.7%
PAT	3,344	3,282	3,272	0%	-2%

Cost ratios are expected to stay contained, leading to a 5% year-on-year increase in pre-provision operating profit (PPOP).

Reported credit costs are seen easing by 20 basis points quarter-on-quarter to around 0.7%, after having risen sharply in the previous quarter. Overall, PAT is projected to dip marginally by about 2% year-on-year.

Key factors to watch out for:

- Management commentary on asset quality, particularly in the retail and commercial vehicle segments

- Any updates on growth strategy. Investors will also look for insights into the bank's unsecured loan expansion plans, which Kotak earlier said it aims to grow by roughly 15% over the medium term.

- Any guidance on NIM trajectory, given management's earlier indication that margins could bottom out in Q2.