Kotak Bank slips as Q1 disappoints

Kotak Mahindra Bank is not doing too well on the bourses today. Ever since it reported its Q1FY16 performance yesterday, the stock has been on a losing streak. Ten days ago, it had hit a new high at Rs.744.45 and today, it is down at Rs.685 levels. Volumes are up almost 4 times.

The market is very disappointed with the Bank’s performance for Q1FY16. There was a drop in both profitability as well as stress on asset quality came forth. Its consolidated net profit fell 26% (YoY) at Rs.517 crore though NII rose 43% at Rs.2163 crore. Provisions showed a sharp rise from Rs.78 crore to Rs.322 crore (QoQ).

In terms asset quality, Gross NPA rose from 1.56% to 2.04% and net NPA too showed a rise – from 0.79% to 0.93%. There was further disappointment when the Bank said that it expects its credit costs to jump this fiscal year as it makes more provisions related to its purchase of ING Vysya Bank. It expects to complete ING Vysya integration process by April’16.