KOTAKBANK - Kotak Mah. Bank

📊 NSE: KOTAKBANK 🏢 Banks - Private Sector 📅 Last Updated: 12/14/2025 9:00

💰 Financial Performance

Revenue Growth by Segment

Consolidated PAT for H1 FY26 showed varied performance: Asset Management grew 54% YoY to INR 836 Cr, while Bank & Other Lending fell 6% to INR 7,272 Cr, Capital Markets fell 5% to INR 960 Cr, and Insurance fell 27% to INR 376 Cr.

Geographic Revenue Split

The bank is expanding its rural footprint, with 68% of the 4 lakh savings accounts opened digitally being located in rural and semi-rural areas.

Profitability Margins

Consolidated PAT for Q2 FY26 was INR 4,468 Cr. Standalone RoA for FY25 stood at 2.3%, while Net Interest Margin (NIM) moderated to 4.4% from 4.8% YoY due to higher funding costs.

EBITDA Margin

Operating profit stood at 3.8% of Average Total Assets (ATA) in FY25. Consolidated PAT for H1 FY26 was INR 8,940 Cr, a 6% YoY decline excluding one-time divestment gains.

Capital Expenditure

The bank continues to invest heavily in technology and digital platforms, maintaining flat operating expenses YoY at the consolidated level despite these investments.

Credit Rating & Borrowing

The bank maintains a CRISIL AAA/Stable rating. Cost of funds was competitive at 5.09% as of March 31, 2025.

⚙️ Operational Drivers

Raw Materials

For banking operations, the primary 'raw materials' are deposits and capital. CASA (Current Account Savings Account) deposits represent 43% of total deposits.

Import Sources

Not applicable as a financial institution; sourcing is domestic through a network of 2,148 branches across India.

Key Suppliers

Not applicable for banking services.

Capacity Expansion

Current physical capacity includes 2,148 branches. Digital capacity is scaling through the '811' platform and 'fyn' portal for SMEs.

Raw Material Costs

Cost of funds stood at 5.09% in FY25. Interest expenses are the primary cost, impacted by the industry-wide challenge of low-cost deposit mobilization.

Manufacturing Efficiency

Provisioning coverage ratio was healthy at 75% as of March 31, 2025, ensuring resilience against credit losses.

Logistics & Distribution

Distribution is driven by 2,148 branches and digital platforms like 'fyn' and 'EwayGo' for trade finance.

📈 Strategic Growth

Expected Growth Rate

13%

Growth Strategy

Growth is driven by the 'One Kotak' approach, focusing on SME book expansion (16% YoY growth to INR 1.09 lakh Cr) and digital scaling via the 'fyn' portal and 'EwayGo' platform which integrates with the GST network.

Products & Services

Savings accounts, home loans, LAP, personal loans, credit cards, CV/CE finance, agri finance, life insurance policies, and mutual fund units.

Brand Portfolio

Kotak811, Solitaire, fyn, EwayGo, Kotak Prime, Kotak Securities, Kotak Mahindra Life Insurance.

New Products/Services

The 'EwayGo' platform for trade finance and 'fyn' unified portal for corporate/SME clients are expected to drive transaction banking fees.

Market Expansion

Focusing on rural and semi-rural segments, where 68% of new digital accounts are currently being sourced.

Market Share & Ranking

Ranked #1 in equity capital markets for the third consecutive year; overall capital market market share increased to 13.1% from 11.6% YoY.

Strategic Alliances

Zurich Insurance Company Ltd acquired a stake in the general insurance business, now renamed Zurich Kotak General Insurance (ZKGI).

🌍 External Factors

Industry Trends

The industry is shifting toward digital-first banking and automated trade finance; Kotak is positioning itself with 'zero-touch' trade finance via EwayGo.

Competitive Landscape

Competes with major Indian commercial banks; maintains a Tier-1 broker status in institutional equities.

Competitive Moat

Moat is built on a diversified financial conglomerate model ('One Kotak') and superior capitalization (CAR of 22.8%), allowing for risk-adjusted growth.

Macro Economic Sensitivity

Sensitive to interest rate volatility which impacted NIM (down to 4.4%) and capital market volumes which lowered subsidiary profits in Q2 FY26.

Consumer Behavior

Increasing adoption of digital banking journeys and automated trade data population among SME customers.

Geopolitical Risks

Geopolitical uncertainties led to net outflows from the equity segment, muting custody balances in Q2 FY26.

⚖️ Regulatory & Governance

Industry Regulations

Subject to RBI capital adequacy norms (maintaining 22.8% vs 15% sensitivity threshold) and IRDAI solvency requirements (2.33x maintained vs 1.5x required).