Private sector lender Kotak Mahindra Bank is expected to report more than 20 percent year-on-year growth in profit and over 15 percent rise in net interest income for the quarter ended December 2020, with sequentially stable asset quality.
Pre-provision operating profit (PPoP) is likely to be strong with growth of more than 30 percent YoY aided by lower cost to income ratio (which could be around 39 percent in Q3 FY21), but loan growth may be under pressure.
"NII is expected to grow by meagre 17 percent YoY on account of the slowdown in the advance growth and lower NIM due to high liquidity. Advance growth is expected to moderate to -2 percent YoY with focus of bank being more on balancesheet strength rather than short term profitability," said Narnolia Financial Services which expects profit growth at 24 percent and PPoP growth of 38 percent YoY.
Motilal Oswal also feels loan growth at (-3.3) percent to remain under pressure, but deposits may show healthy traction, rising in double-digit, while profit growth is expected to be around 20.4 percent and PPoP at 33.5 percent in Q3FY21 YoY.
"Asset quality of the bank is expected to remain moderately effected however the guidance on potential slippages going forward needs to be tracked," said Narnolia said.
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