Kotak Mahindra Bank Q2 Profit Jumps 29% to Rs 4,212 Crore

Kotak Mahindra Bank has posted a substantial expansion in its financial performance for the second quarter of the 2026-27 financial year, underpinned by aggressive loan book growth and improving asset health. According to reporting compiled by Whalesbook and TradingView, the private lender registered a 29% year-on-year surge in standalone net profit, reaching Rs 4,212 crore for the period ending September 30, 2026. The results arrive during a broader corporate earnings season across the Economic Times coverage, where multiple major financial institutions have delivered varying updates on profitability, provision costs, and margin pressures.

The bank's core revenue TradingView noted a 15.7% rise in Net Interest Income (NII) to Rs 8,459 crore, compared with Rs 7,311 crore in the corresponding quarter of the previous year. Operating profit climbed 21.1% year-on-year to Rs 6,382.2 crore. On a consolidated basis, the institution's Profit After Tax rose 26% to Rs 5,645 crore Whalesbook. Business expansion was reflected in net advances, which jumped 25% year-on-year to reach Rs 5,77,295 crore. Excluding loans extended against FCNR(B) deposits and the loan portfolio acquired from Kotak Mahindra Investments Ltd (KMIL), core net advances grew 19%.

Media additions

Asset quality metrics continued to strengthen across the board. Gross Non-Performing Assets (GNPA) declined to 1.04% as of September 30, 2026, improving from 1.18% in the preceding June quarter and down from 1.39% in the year-ago period. Net Non-Performing Assets also edged down to 0.24%. Provisions stood at Rs 803.6 crore, representing a 15.2% decrease from the same period last year, though up sequentially from Rs 668 crore in the June quarter. The bank maintained a strong Capital Adequacy Ratio of 21.9%.

Despite robust lending growth, the aggressive expansion of the deposit base exerted downward pressure on lending profitability. Net Interest Margins moderated to 4.31%, down from 4.54% a year earlier. Bank management identified FCNR(B) deposit mobilization through international branches as the primary driver of this compression Whalesbook. Total deposits grew 23% to Rs 651,491 crore, with FCNR(B) inflows accounting for Rs 55,344 crore mobilized during the quarter. Excluding these specific flows, core deposit growth was 13%.

The influx of term deposits altered traditional liquidity ratios. The current account and savings account (CASA) ratio stood at 38.2% at the close of September 2026, down from 42.3% in the corresponding period of the previous year. Excluding FCNR(B) deposits, the core CASA ratio stood at 41.8%. Subsidiary operations also bolstered overall performance, with Kotak Securities generating Rs 348 crore in PAT and Kotak Asset Management contributing Rs 287 crore Whalesbook.

Market reaction to Kotak Mahindra Bank's filing saw shares end 1.5% lower at Rs 430.50 on the National Stock Exchange on Friday, October 23, 2026, though the stock has recorded a 4.2% gain over the preceding month.

Investors and analysts will monitor how the bank manages its cost of funds and stabilizes its margins while maintaining its loan book expansion pace Whalesbook. Further corporate updates and strategic announcements from management regarding deposit deployment will be evaluated in subsequent quarters as the Business coverage sector processes ongoing monetary and credit trends.