Kotak Mahindra Bank Shares in Focus; Know About Its Asset Quality Amid Stock Volatility

As of January 21, 2025, Kotak Mahindra Bank’s share price stood at ₹1,904.30 at 2:30 PM on NSE, reflecting a slight decline of 0.84% from the previous day. This dip followed a strong rally on January 20, when the stock surged by 9.21%, reaching ₹1,920.50.

Share Price-performance

On January 17, the stock experienced a 2.60% drop, falling to ₹1,758.60. During the first week of January, the stock showed positive momentum, starting the year at ₹1,788.40 and climbing to ₹1,838.65 on January 3, registering a modest gain of 0.08%.

Currently, the stock is trading near its 52-week high of ₹1,942, which was recorded on September 23, 2024. These movements highlight that while Kotak Mahindra Bank’s stock has faced some volatility, it has largely remained resilient, consistently trading close to its 52-week peak.

Quarterly Asset Quality Metrics

Note: The table above presents the asset quality parameters for the bank over the last 4 quarters, from Q3 FY25 to Q4 FY24.

GNPA (Gross Non-Performing Assets) 

The bank shows a slight improvement in GNPA, moving from 1.50% in Q3 FY25 to 1.49% in Q2 FY25, and further stabiliSing at 1.39% in both Q1 FY25 and Q4 FY24. This indicates that the bank has successfully kept its non-performing assets at a relatively stable and manageable level.

NNPA (Net Non-Performing Assets) 

NNPA saw a marginal improvement, with a slight decrease from 0.43% in Q2 FY25 to 0.41% in Q3 FY25. This low and stable level of NNPA suggests that the bank’s recovery efforts and asset quality management remain effective.

PCR (Provision Coverage Ratio) 

The Provision Coverage Ratio remained robust, though it saw a minor decline from 76% in Q4 FY24 to 75% in Q1 FY25, and further to 73% in Q3 FY25. Despite the slight drop, the PCR continues to reflect a healthy cushion against potential asset deterioration, indicating strong risk management practices by the bank.

Peer Performance

Axis Bank is one of the few banks that has released its Q3 earnings so far. The bank has shown a positive trend in its asset quality, with a reduction in both Gross Non-Performing Assets (GNPA) and Net Non-Performing Assets (NNPA) compared to the previous year.

Kotak Mahindra Bank’s GNPA ratio stands at 1.50% for Q3 FY25, which is slightly higher than Axis Bank’s 1.46% for the same quarter.

However, Kotak’s GNPA ratio has been stable over the last few quarters, with a minimal increase from 1.39% in Q1 FY25 and Q4 FY24.

Kotak’s NNPA ratio of 0.41% is slightly higher than Axis Bank’s 0.35%, but Kotak has seen a slight improvement in NNPA from 0.43% in Q2 FY25, indicating consistent efforts to manage bad loans.

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