Kotak Mahindra Bank Q2 FY27 Earnings Update

Executive Summary Kotak Mahindra Bank delivered a strong financial performance for the quarter ended September 30, 2026, highlighted by a 29.5% year-over-year (YoY) surge in standalone net profit to ₹4,212 crore. The quarter was characterized by robust loan growth, double-digit increases in core operating metrics, and a sequential improvement in asset quality, despite some expected compression in net interest margins. Financial Performance & Profitability Net Interest Income (NII): Rose 15.7% YoY to ₹8,459 crore, driven by healthy credit expansion. Operating Profit: Increased by 21.1% YoY to reach ₹6,382.2 crore. Net Margin Profile: Net Interest Margin (NIM) moderated to 4.31%, down from 4.54% in Q2 FY26 and 4.53% in Q1 FY27, reflecting broader industry trends in the cost of funds. Asset Quality & Provisioning Non-Performing Assets (NPAs): Asset quality demonstrated sequential strengthening. Gross NPAs improved by 14 basis points to 1.04% from 1.18% in the preceding quarter. Net NPAs similarly compressed to 0.24% from 0.27%. Provisions: Total provisions stood at ₹803.6 crore, representing a 15.2% decline YoY. However, provisions saw a 20.3% sequential increase from ₹668 crore in the June quarter. Balance Sheet & Funding Metrics Credit Growth: Net advances expanded significantly by 25% YoY to ₹5,77,295 crore. Adjusting for the loan portfolio acquired from Kotak Mahindra Investments Ltd (KMIL) and loans extended against FCNR(B) deposits, core net advances grew at a robust 19% YoY. Deposit Mobilization: The bank successfully mobilized ₹55,344 crore in FCNR(B) deposits through its international branches during the quarter.