Kotak Mahindra Bank announced its Q2 FY2026 (July–September 2025) financial results on October 25, 2025, showcasing steady growth in core banking operations across deposits, advances, and net interest income (NII). However, profitability saw a mild moderation due to higher provisions and lower other income, particularly from its insurance subsidiary.
Despite these short-term pressures, Kotak Mahindra Bank continues to emphasize quality growth, digital innovation, and balance sheet resilience amid an increasingly competitive banking environment.
In this article, we’ll break down Kotak Mahindra Bank’s Q2 FY2026 results, highlighting its key financial metrics, business performance, and strategic outlook for the coming quarters.
Key Highlights
| Metric | Q2 FY26 | Q2 FY25 | YoY Growth |
|---|---|---|---|
| Revenue (Standalone) | ₹7,311 crore | ₹7,020 crore | +4.2% |
| Net Profit (Standalone) | ₹3,253 crore | ₹3,344 crore | -2.7% |
| Operating Profit | ₹5,268 crore | ₹5,099 crore | +3.3% |
| EPS (Consolidated) | ₹22.5* (est.) | ₹25.4* (est.) | -11% |
*Estimated based on reported PAT and outstanding shares.
Management Commentary
The management highlighted steady operating performance led by healthy loan growth, stable NIMs (4.54%), and improved asset quality.
They noted that while core banking income grew steadily, profits were impacted by provisions and reduced other income from insurance and investment segments.
The bank continues to focus on technology-driven lending, expanding its retail base, and maintaining strong capital adequacy (Tier-1 at ~20.9%).
Segment Performance
Standalone Bank
- Net Interest Income (NII): ₹7,311 crore, up 4.2% YoY, supported by higher loan growth and stable margins.
- Fee & Service Income: ₹2,415 crore, up 4% YoY.
- Net Interest Margin (NIM): 4.54%, stable YoY, among the best in the private banking sector.
- Asset Quality: GNPA at 1.39% and NNPA at 0.32%, showing consistent improvement.
Consolidated Business
| Segment | Highlights |
|---|---|
| Asset Management | Revenue rose 22.9% YoY to ₹258 crore. |
| Insurance (Kotak Life) | Revenue declined 31% YoY, affecting overall income. |
| Kotak Prime | PAT ₹246 crore (vs ₹269 crore YoY). |
| Kotak Investments | PAT ₹120 crore (vs ₹141 crore YoY). |
Despite a 11.4% YoY dip in consolidated PAT to ₹4,468 crore, the group remains well-capitalized with net worth of ₹1,67,935 crore and a CAR of ~22%.
Balance Sheet Highlights
- Total Deposits: ₹5.28 lakh crore (+14.6% YoY)
- Advances: ₹4.63 lakh crore (+15.8% YoY)
- CASA Ratio: 42.3% (stable, indicating strong retail base)
- Capital Adequacy: 22.1–22.8%, well above regulatory norms
- LCR: 132% average, ensuring robust liquidity
- Customer Base: 5.2 crore customers, expanding steadily
Market Reaction
Post-results, Kotak Bank’s stock traded steady to slightly positive on October 25, 2025. Investors viewed the results as balanced — with strong loan growth and stable NIMs offset by weaker non-banking performance. Analysts noted the bank’s healthy asset quality and high capital ratios as key positives amid sector-wide margin pressures.
Peer Comparison
Compared to peers like HDFC Bank and ICICI Bank, Kotak’s NIM remains among the highest in the private banking space, reflecting efficient capital deployment. However, its profit growth lagged peers this quarter due to higher provisions and muted insurance income. Kotak continues to stand out for its strong CASA base, low NPAs, and robust digital ecosystem.
Future Outlook
Analysts expect Kotak Bank’s profitability to rebound in H2 FY26, supported by festive season lending, higher retail demand, and controlled credit costs. The bank’s focus on digital acquisition, SME lending, and cross-selling across its ecosystem could drive double-digit growth ahead.
Management guidance indicates steady NIMs around 4.4–4.5% and continued focus on maintaining asset quality below 1.5% GNPA.
FAQs
Q1. What was Kotak Bank’s net profit in Q2 FY26?
The standalone net profit stood at ₹3,253 crore, down 2.7% YoY.
Q2. Did Kotak Bank beat market expectations?
The results were largely in line with analyst expectations, with modest NII growth and stable asset quality.
Q3. How did Kotak Bank’s margins perform?
NIM remained steady at 4.54%, reflecting strong operational efficiency.
Q4. What drove the decline in consolidated profit?
Lower insurance income and higher provisions affected consolidated profitability, despite solid banking performance.
Q5. How strong is Kotak’s balance sheet?
The bank reported a CAR above 22% and GNPA at just 1.39%, highlighting financial strength.
Conclusion
Kotak Mahindra Bank’s Q2 FY26 results reflect a solid core banking performance with stable margins, growing deposits, and improved asset quality. While short-term profitability dipped slightly, the bank remains one of the most resilient and well-capitalized private sector lenders in India.
For investors, Kotak continues to offer steady long-term growth potential backed by prudent risk management, digital transformation, and diversified financial subsidiaries.
Sources: Kotak Bank Investor Presentation
