Kotak Mahindra Bank Limited reported strong financial performance for the second quarter of FY27, with standalone net profit rising 29% year-on-year, supported by higher net interest income, lower provisions and improving asset quality.
The private sector lender reported standalone profit after tax (PAT) of ₹4,212 crore for the quarter ended September 30, 2026, compared with ₹3,253 crore in the corresponding quarter of the previous financial year. Consolidated net profit increased 26% year-on-year to ₹5,645 crore from ₹4,468 crore in Q2 FY26.
Kotak Mahindra Bank Q2 Results : Key Financial Highlights
- Standalone net profit: ₹4,212 crore, up approximately 29% year-on-year.
- Consolidated net profit: ₹5,645 crore, up approximately 26% year-on-year.
- Net interest income (NII): ₹8,459 crore, up 16% year-on-year.
- Net interest margin (NIM): 4.31%, compared with 4.54% a year earlier.
- Gross non-performing assets (GNPA): 1.04%, compared with 1.39% in Q2 FY26.
- Net non-performing assets (NNPA): 0.24%, down from 0.32% a year earlier.
- Standalone provisions: Approximately ₹803 crore, down 15% year-on-year.
- Net advances: ₹5.77 lakh crore, up 25% year-on-year.
- Total deposits: ₹6.51 lakh crore, up 23% year-on-year.
Net Interest Income Growth Supports Profitability
Kotak Mahindra Bank’s standalone net interest income rose 16% year-on-year to ₹8,459 crore in Q2 FY27, compared with ₹7,311 crore in the corresponding quarter last year.
Net interest income represents the difference between the interest a bank earns on loans and investments and the interest it pays on deposits and borrowings. Growth in NII indicates that the bank generated higher net interest income during the quarter.
However, the bank’s net interest margin declined to 4.31% from 4.54% a year earlier and 4.53% in the preceding quarter. The bank attributed the moderation in margin largely to the mobilisation of foreign currency non-resident bank (FCNR(B)) deposits during the quarter.
Lower Provisions Support Earnings Growth
Provisions for potential bad loans and other losses declined approximately 15% year-on-year. Standalone provisions fell to around ₹803 crore from ₹947 crore in Q2 FY26.
The decline in provisions supported profitability during the quarter. Annualised credit cost also improved to 0.35%, compared with 0.79% in the corresponding quarter of the previous financial year.
Operating profit before provisions and contingencies increased approximately 21% year-on-year to ₹6,382 crore, reflecting improved operating performance.
Asset Quality Improves
Kotak Mahindra Bank reported an improvement in asset quality during the September quarter.
Gross non-performing assets declined to 1.04% of advances as of September 30, 2026, compared with 1.39% a year earlier. Net NPA also decreased to 0.24% from 0.32% in Q2 FY26.
The improvement indicates that a smaller proportion of the bank’s advances was classified as non-performing compared with the year-ago period. Asset quality remains an important indicator for lenders because higher defaults can increase credit costs and affect profitability.
Advances and Deposits Record Strong Growth
The bank continued to report growth in lending and deposits. Net advances increased 25% year-on-year to approximately ₹5.77 lakh crore, while total deposits rose 23% to around ₹6.51 lakh crore.
The bank’s consolidated customer assets reached approximately ₹6.99 lakh crore, representing 21% year-on-year growth. These figures reflect expansion in the bank’s customer business, although deposit growth was partly supported by foreign currency non-resident deposits raised during the quarter.
What to Watch Next
Key factors to monitor in the coming quarters include net interest margin trends, loan and deposit growth, asset quality, credit costs and operating expenses. The sustainability of NII growth will also be important, particularly as changes in the deposit mix can influence the bank’s margins.
Conclusion
Kotak Mahindra Bank reported a 29% year-on-year increase in standalone net profit to ₹4,212 crore in Q2 FY27, while consolidated net profit rose 26% to ₹5,645 crore. Higher net interest income, lower provisions and improved asset quality supported the performance.
However, the decline in net interest margin highlights the importance of monitoring funding costs and deposit composition in the coming quarters.
Source: Kotak Mahindra Bank’s Q2 FY27 financial results and investor presentation; Reuters and Business Standard.
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