KOTAK MAHINDRA BANK 2023-24 Annual Report Analysis

Tue, 16 Jul

KOTAK MAHINDRA BANK has announced its results for the year ended March 2024. Let us have a look at the detailed performance review of the bank during the year 2023-24.

KOTAK MAHINDRA BANK Income Statement Analysis

• Interest income during the year rose 33.4% on a year-on-year (YoY) basis.
• Interest expenses were up by 56.6% YoY during the same period.
• Operating expenses increased by 36.3% YoY during the year.
• The bank's net interest income (NII) increased by 21.4% YoY during the fiscal. Consequently, net interest margins (NIM) witnessed a decline and stood at 5.0% in FY24 as against 5.0% in FY23.
• Other income increased by 46.3% YoY during the year.
• Net profit for the year increased by 22.0% YoY.
• Net profit margins during the year declined to 32.4% in FY24 from 35.4% in FY23.

KOTAK MAHINDRA BANK Income Statement – 2023-24

No. of Mths Year Ending		12 Mar-23*	12 Mar-24*	% Change
Interest Income	Rs m	421,511	562,366	33.4%
Other Income	Rs m	259,910	380,373	46.3%
Interest Expense	Rs m	144,111	225,672	56.6%
Net Interest Income	Rs m	277,399	336,694	21.4%
Operating Expense	Rs m	336,450	458,708	36.3%
Pre-provision Operating Profit	Rs m	200,859	258,358	28.6%
Provisions & Contingencies	Rs m	53,054	78,590	48.1%
Profit before tax	Rs m	196,462	238,634	21.5%
Tax	Rs m	48,657	58,866	21.0%
Profit after tax	Rs m	149,250	182,132	22.0%
Minority Interest	Rs m	0	0	0.0%
Net Interest Margin	%	5.0	5.0
Net profit margin	%	35.4	32.4

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KOTAK MAHINDRA BANK Balance Sheet Analysis

• The bank's deposits during FY24 stood at Rs 4,452.7 bn as compared to Rs 3,612.7 bn in FY23, thereby witnessing an increase of 23.3%.
• Advances for the year stood at Rs 4,303.5 bn as compared to Rs 3,591.1 bn during FY23, a rise of 19.8%.
• Cost of deposits for KOTAK MAHINDRA BANK rose 25.7% and stood at 4.1%, while yield on advances rose to 9.5%.
• The lender's investments rose to Rs 2,464.5 bn during the year from Rs 1,953.4 bn in FY23.
• Borrowing stood at Rs 751.1 bn, a growth of 31.7% as compared to previous year.
• Overall, the total assets and liabilities for FY24 stood at Rs 7,676.7 bn as against Rs 6,204.3 bn during FY23, thereby witnessing a rise of 23.7%.

KOTAK MAHINDRA BANK Balance Sheet – as on March 2024

No. of Mths Year Ending		12 Mar-23*	12 Mar-24*	% Change
Networth	Rs m	1,122,541	1,298,924	15.7%
Advances	Rs m	3,591,075	4,303,516	19.8%
Deposits	Rs m	3,612,726	4,452,688	23.3%
Yield on advances	%	8.6	9.5
Cost of Deposits	%	3.3	4.1
Investments	Rs m	1,953,380	2,464,457	26.2%
Borrowings	Rs m	570,339	751,056	31.7%
Total Assets	Rs m	6,204,297	7,676,670	23.7%

Current Valuations for KOTAK MAHINDRA BANK

• The trailing twelve-month earnings per share (EPS) of the bank stands at Rs 91.6, an improvement from the EPS of Rs 75.1 recorded last year.
• The price to earnings (P/E) ratio, at the current price of Rs 1,822.2, stands at 20.4 times its trailing twelve months earnings.
• The price to adjusted book value (P/ABV) ratio at current price levels stands at 2.8 times, while the price to income ratio stands at 6.6 times.

Per Share Data/Valuations

No. of Mths Year Ending		12 Mar-23*	12 Mar-24*
Income per share (Unadj.)	Rs	212.2	282.9
Earnings per share (Unadj.)	Rs	75.1	91.6
Diluted earnings per share	Rs	75.1	91.6
Avg P/E ratio	Rs	24.1	20.4
Avg P/ABV ratio	Rs	3.3	2.8
Avg Market Cap	Rs	3,602,620	3,707,274
Dividends per share (Unadj.)	Rs	1.50	2.00

Ratio Analysis for KOTAK MAHINDRA BANK

• Efficiency Ratios

  Credit/Deposit Ratio: The bank's credit/deposit ratio deteriorated and stood at 96.6x during FY24, from 99.4x during FY23. The credit/deposit ratio tells us how much money a bank has raised in the form of deposits and has deployed as loans.

  Debt to Equity Ratio: The bank's debt to equity ratio increased and stood at 4.01x during FY24, from 3.73x during FY23. The debt to equity ratio of a bank tells us how much debt a bank uses relative to its equity.

• Liquidity Ratios

  Capital Adequacy Ratio (CAR): KOTAK MAHINDRA BANK's capital adequacy ratio (CAR) was at 0.0% as on 31 March 2024 as compared to 20.8% a year ago. This ratio helps measure the financial strength of the bank or any finance company to meet their obligations using their assets and capital.

  A bank that has a good CAR has enough capital to absorb potential losses. Thus, it has less risk of becoming insolvent and losing depositor's money.

  Provision Coverage Ratio (PCR): Apart from CAR, you also need to take a look at the bank's PCR and LCR ratios. Provisioning coverage ratio (PCR) is the percentage of funds that a bank sets aside for covering losses due to bad debts.

  So a high PCR ratio means asset quality issues are under control and the bank is not vulnerable.

  Liquidity Coverage Ratio (LCR): The LCR is designed to ensure that banks hold a sufficient reserve of high-quality liquid assets to allow them to survive a period of significant liquidity stress lasting 30 calendar days.

• Profitability Ratios

  Return on Equity (ROE): The return on equity (ROE) ratio for the bank improved and stood at 14.0% during FY24, from 13.3% during FY23. The ROE measures the ability of a firm to generate profits from its shareholders capital in the company.

  Return on Assets (ROA): The return on asset (ROA) ratio of the bank deteriorated and stood at 2.37% during FY24, from 2.41% during FY23. The ROA measures how efficiently the company uses its assets to generate earnings.

  Return on Capital Employed (ROCE): The ROCE for the bank improved and stood at 15.06% during FY24, from 13.86% during FY23. The ROCE measures the ability of a bank to generate profits from its total capital (shareholder capital plus debt capital) employed in the bank.

• NPA Ratios

  Gross NPA Ratio: The gross NPA ratio is the ratio of a bank's gross NPAs to gross advances. KOTAK MAHINDRA BANK's gross NPA ratio stood at 0.0% as of 31 March 2024 compared to 1.8% in the same period a year ago.

  A high gross NPA ratio is a bad thing as it indicates how much of a bank's loans are in danger of not being repaid.

  Net NPA Ratio: In simple language, net NPAs are simply the total non-performing assets minus the provision left aside. It gives you the exact value of NPAs after the bank has made provisions.

  The net NPA ratio of KOTAK MAHINDRA BANK was 0.0% in financial year 2024. This compared with 0.4% a year ago.

Key Ratio Analysis

No. of Mths Year Ending		12 Mar-23*	12 Mar-24*
Credit/Deposit Ratio	x	99.4	96.6
Debt to Equity Ratio	x	3.7	4.0
Loans / Deposits	x	0.2	0.2
Capital Adequacy Ratio	%	20.8	0.0
Return on Equity	%	13.3	14.0
Return on Assets	%	2.4	2.4
Return on Capital Employed	%	13.9	15.1
% of Gross NPAs	%	1.8	0.0
% of Net NPAs	%	0.4	0.0
Yield on Advances	x	8.6	9.5
Yield on Investments	x	5.5	6.5

To see how KOTAK MAHINDRA BANK has performed over the last 5 years, please visit here.

KOTAK MAHINDRA BANK Share Price Performance

Over the last one year, KOTAK MAHINDRA BANK share price has moved down from Rs 1,868.8 to Rs 1,822.2, registering a loss of Rs 46.6 or around 2.5%.

Meanwhile, the S&P BSE BANKEX is trading at 60,400.8 (down 0.0%). Over the last one year it has moved up from 50,559.6 to 60,400.8, registering a gain of 9,841.2 points (up 19.5%).

Overall, the S&P BSE SENSEX is up 23.6% over the year.

(To know more, you can check out historical annual results for KOTAK MAHINDRA BANK here and quarterly results for KOTAK MAHINDRA BANK here)