Steady Growth in Income and Profitability
Over the past seven years, Kotak Mahindra Bank’s interest earned has shown a strong upward trajectory, rising from ₹23,890 crore in March 2019 to ₹52,920 crore in March 2025. This growth is primarily driven by a significant increase in interest on advances and bills, which more than doubled during this period. Income from investments and other income streams have also contributed to the overall rise in total income, which surged from ₹28,547 crore in 2019 to ₹67,858 crore in 2025.
Net interest income, a critical indicator of core banking profitability, increased steadily from ₹11,206 crore in 2019 to ₹28,342 crore in 2025. Despite rising interest expenses, the bank has maintained a healthy net interest margin, hovering around 5% in recent years, reflecting effective asset-liability management.
Profit before tax has more than doubled, reaching ₹21,584 crore in 2025 from ₹7,386 crore in 2019. Correspondingly, profit after tax rose from ₹4,865 crore to ₹16,450 crore, supported by a stable tax outgo and absence of exceptional items in most years. The bank’s earnings per share (EPS) have also shown a consistent increase, from ₹25.49 in 2019 to ₹82.74 in 2025, signalling strong shareholder returns.
Transformation in full progress! This Micro Cap from Auto Ancillary just achieved sustainable profitability after tough times. Be early to witness this powerful comeback story!
- - Sustainable profitability reached
- - Post-turnaround strength
- - Comeback story unfolding
Operational Efficiency and Expense Management
The bank’s total expenditure excluding depreciation has increased in line with its expanding operations, from ₹7,515 crore in 2019 to ₹18,754 crore in 2025. Employee costs and other operating expenses have risen steadily, reflecting investments in human resources and infrastructure. Despite this, Kotak Mahindra Bank has maintained a strong operating profit margin, averaging around 59% in recent years, indicating effective cost control and operational leverage.
Provisions and contingencies have fluctuated, with a notable increase in 2025 to ₹2,942 crore, reflecting prudent risk management in a dynamic credit environment. The provision coverage ratio has improved over the years, reaching 78% in 2025, underscoring the bank’s commitment to asset quality.
Robust Asset Quality and Capital Adequacy
Kotak Mahindra Bank’s asset quality has strengthened significantly. Gross non-performing assets (NPAs) have declined from 3.25% in 2021 to 1.42% in 2025, while net NPAs have reduced from 1.21% to 0.31% over the same period. This improvement is a testament to the bank’s rigorous credit appraisal and recovery processes.
The bank’s capital adequacy ratio remains comfortably above regulatory requirements, with total capital adequacy at 22.25% and Tier 1 capital at 20.5% in 2025. This strong capital base supports the bank’s growth ambitions and provides a cushion against potential credit risks.
Balance Sheet Expansion and Liquidity Position
The bank’s total assets have nearly doubled from ₹3,60,387 crore in 2020 to ₹6,94,587 crore in 2025, driven by growth in advances and investments. Advances increased from ₹2,19,748 crore in 2020 to ₹4,26,909 crore in 2025, reflecting strong credit demand and market penetration. Deposits have also grown robustly, reaching ₹4,99,055 crore in 2025 from ₹2,62,821 crore in 2020, with a CASA ratio of 43% in 2025, indicating a healthy mix of low-cost funds.
Cash and balances with the Reserve Bank of India and other banks have increased, supporting liquidity management. The number of branches and ATMs has expanded steadily, enhancing the bank’s reach and customer service capabilities.
Curious about Kotak Mah. Bank from Private Sector Bank? Get the complete picture with our detailed research report covering fundamentals, technicals, peer analysis, and everything you need to decide!
- - Detailed research coverage
- - Technical + fundamental view
- - Decision-ready insights
Cash Flow and Shareholder Value
Cash flow from operations has shown variability, with net profit before tax rising steadily but adjustments for liabilities and assets causing fluctuations. The bank’s closing cash and cash equivalents increased from ₹32,542 crore in 2023 to ₹65,779 crore in 2025, reflecting improved liquidity and cash management.
Shareholder funds have grown substantially, from ₹49,018 crore in 2020 to ₹1,17,240 crore in 2025, supported by reserves accumulation and retained earnings. The book value per share has increased from ₹253.60 in 2020 to ₹589.20 in 2025, signalling enhanced intrinsic value for investors.
Summary
Kotak Mahindra Bank’s historical performance reveals a well-managed institution with consistent growth in income, profitability, and asset quality. Its strong capital adequacy, improving asset quality, and expanding balance sheet position it favourably among private sector banks. While operational expenses have risen, the bank’s ability to maintain healthy margins and control provisions reflects sound management. Investors can note the steady rise in earnings per share and book value, underscoring value creation over time.
Limited Time Only! Subscribe for Rs. 12,999 and get 1 Year of MojoOne + an Additional Year Completely FREE. Don't miss out on this exclusive offer. Claim Your Free Year →
