Kotak Bank Share Price Tumbles 7% After Q1 Results Fall Short Of Investors’ Expectations

Kotak Mahindra Bank share price tumbled as much as 7 per cent in early trade on July 28 as the bank’s earnings for the April-June quarter (Q1 FY26) fell short of investors’ expectations. Kotak Bank share price opened with a gap-down at Rs 2,025.30 per share on the National Stock Exchange (NSE) and slipped further to an intraday low of Rs 1,977 apiece, down 6.94 per cent against its previous close.

With today’s fall, the banking share has extended decline for the third consecutive session.

Kotak Bank Q1 FY26 Results

Kotak Mahindra Bank reported a 6.76 per cent year-on-year (YoY) decline in its standalone net profit for the first quarter of FY26, posting Rs 3,282 crore compared to Rs 3,520 crore in the same period last year. However, the bank’s net interest income (NII) rose 6 per cent YoY to Rs 7,259 crore in Q1 FY26, up from Rs 6,842 crore in Q1 FY25. Net interest margin (NIM) for the quarter came in at 4.65 per cent.

The bank's operating profit rose 6 per cent YoY to Rs 5,564 crore, as against Rs 5,254 crore in the same quarter last year. Profit after tax (PAT) for Q1 FY26 came in at Rs 3,282 crore, slightly lower than Rs 3,520 crore in Q1FY25, excluding the one-time gain from the divestment of Kotak General Insurance, the company said in its exchange filing.

In terms of asset quality, the bank’s gross non-performing assets (GNPA) stood at 1.48 per cent, up from 1.39 per cent a year ago. Net NPA was 0.34 per cent, nearly unchanged from 0.35 per cent in the previous year. The provision coverage ratio was at 77 per cent as of June 30, 2025.

The private lender’s return on assets (ROA) stood at 1.94 per cent and return on equity (ROE) at 10.94 per cent on an annualised basis.

Net advances reached Rs 4,44,823 crore as of June 30, 2025, up from Rs 3,89,957 crore a year earlier. Unsecured retail advances, including retail microcredit, accounted for 9.7 per cent of the total net advances.

On the deposit side, average total deposits rose 13 per cent YoY to Rs 4,91,998 crore. Within this, current account deposits increased 9 per cent to Rs 67,809 crore, savings deposits rose 2 per cent to Rs 1,24,186 crore, and term deposits jumped 19 per cent to Rs 3,00,003 crore. The CASA ratio as of June 30, 2025, stood at 40.9 per cent.

The bank’s credit to deposit ratio stood at 86.7 per cent. Its total customer base grew to 5.4 crore by the end of June 2025, up from 5.1 crore a year ago.

What Brokerages Say

ICICI Securities in a note on Kotak Mahindra Bank's Q1 earnings said that the bank's Q1 performance was weak, mainly due to a decline in net interest margin and higher credit costs, despite strong loan growth. The growth was largely driven by corporate loans, while unsecured retail loans declined. Even after cutting savings deposit rates sharply, the cost of funds didn’t come down much, the brokerage noted.

On the positive side, operating expenses were well-controlled, helping offset slower revenue growth, ICICI Securities said. Asset quality saw some pressure, especially from the retail commercial vehicle and rural segments, though stress in personal loans and credit cards is stabilising, and microfinance-related stress may have peaked, it said.