Kotak Bank Share Price Slumps After Q1 2025 Results: Should You Buy, Sell, or Hold?
Kotak Bank’s share price dropped sharply after the Q1 2025 results, leaving investors looking for answers. The primary keyword, “Kotak Bank share price,” is on everyone’s mind as the stock fell nearly 6.5% to a day’s low of ₹1,986.55 on July 28, 2025, after the bank reported a 7% year-on-year decline in standalone net profit for the June quarter.
Despite a tough quarter, the bank posted a 6% YoY rise in net interest income, touching ₹7,259 crore. An increase in provisions and tightening up of profit margins was the significant drag, though. There was no one-time boost in the bottom line, as the sale of a stake in its insurance business, Kotak General Insurance, had already been booked in the last year. The shareholders are now contemplating whether the correction is a buy or a warning sign.
Q1 2025 Performance by the Numbers of Kotak Bank 2025
| Key Metric | Q1 FY26 (June 2025) | Q1 FY25 (June 2024) | YoY Change |
| Standalone Net Profit (PAT) | ₹3,282 crore | ₹3,520 crore | -7% |
| Net Interest Income (NII) | ₹7,259 crore | ₹6,842 crore | +6% |
| Gross NPA (GNPA) | 1.48% | 1.39% | +0.09 pp |
| Net NPA (NNPA) | 0.34% | 0.34% | Unchanged |
| Provision Coverage | 77% | – | – |
| Average Advances | ₹4,44,823 crore | ₹3,89,957 crore | +14% |
| CASA Ratio | 40.9% | 43.4% | -2.5 pp |
What Dragged Kotak’s Q1 Results in 2025?
- Higher Provisions: Provisions and contingencies increased 109 per cent YoY to 1,208 crore, mainly due to increasing credit expenses and pressure in microfinance books as well as on the retail vehicle loans.
- Declined Asset Quality: The gross non-performing asset (NPA) ratio rose to 1.48% from 1.39%, reflecting softening asset quality.
- Margin Pressure: Net interest margin (NIM) remained tight at 4.65%, down from previous quarters, as aggressive rate repricing and more secured (but lower-yield) lending eroded profitability.
- CASA Weakness: The CASA (Current Account Savings Account) ratio slid to 40.9% from 43.4%, showing growing reliance on higher-cost deposits.
Kotak Bank Share Price vs. Peers: 1-Year Returns
| Bank | 1-Year Return | 5-Year Return | Price-to-Book (PB) Ratio |
| Kotak Mahindra Bank | 20% | 70% | 2.2x |
| Nifty Private Banks | ~25% (avg.) | 154% | 2.6x (sector avg.) |
Kotak Mahindra Bank’s stock has underperformed top private peers over a multi-year horizon but now trades at a lower price-to-book, which may make it attractive for long-term investors.
Analyst View for Kotak Bank Share: Should You Buy Now?
- Morgan Stanley: Keeps Overweight with a target of 2600, saying there is good loan expansion but warns of margin and asset quality winds.
- Jefferies: Buy rating with a target of 2550; notes that the company has seen solid growth in advances and estimates near-term margin pressures to weigh on profits.
- Antique: Cuts target to ₹2,440 (from ₹2,540) post results, but still forecasts a 14% return on equity for FY26–28 due to balance sheet strength.
- Motilal Oswal: Recommends a buy; raises target to 2,400 but cuts target to 2,400; hopes the company will recover in the second half after its loan mix improves.
Kotak Mahindra Bank of Kotak Bank Share: Q1 Asset and Deposit Trends in 2025
| Parameter | June 2025 | June 2024 | Growth |
| Net Advances | ₹4,44,823 crore | ₹3,89,957 crore | +14% |
| Avg. Total Deposits | ₹4,91,998 crore | ₹4,35,603 crore | +13% |
| End-of-Period Deposits | ₹5,13,000 crore | – | +14.6% |
| Avg. CASA Deposits | ₹1,92,000 crore | – | +4.2% YoY |
What’s Keeping Investors Hopeful in Kotak Bank Shares in 2025?
- High Loan Growth: Loan and customer asset growth remain in the two-digit range.
- Appealing Valuations: Kotak Bank’s stock price currently trades at a one-year forward book price of 2.2x compared to peers with higher book prices.
- Balance Sheet Strength: High provision coverage (77%) and a sound liquidity coverage ratio (138%) give some safety cushion.
- Recovery Potential: Analysts opine that margins would stabilize during the H2 FY26 period as the rates normalize and the unsecured credit starts to take off.
Risks to Watch
- Persistent pressure on the margins due to the repricing of the deposits
- Complex situation in the asset quality in terms of retail/MFI clusters
- There can be regulatory and competitive pressures maintained at lower levels of return ratios, Healthier and improved economics, Ken in standards improvement, Healthier and improved incremental economics, Ken in calibre gains
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Frequently Asked Questions (FAQ)
1. Why did Kotak Bank’s share price drop after Q1 2025 results?
The share decline was because of a 7% YoY profit decrease, more provisions, squeezing the margin, and asset quality.
2. What are the main risks for the Kotak Bank share price in 2025?
The main risks are further margin compression, an increase in NPAs in some segments, and slower growth in the unsecured lending.
3. Do analysts have bullish feelings towards the Kotak Bank share price?
The vast majority of brokers keep buy ratings with the targets lowered, referring to mid-term rebound possibilities in case margins and asset quality recover.
4. What is Kotak’s Q1 PAT and NII for 2025?
PAT (Profit After Tax) was ₹3,282 crore (down 7%), and Net Interest Income was ₹7,259 crore (up 6% YoY).
5. What is the price-to-book ratio of Kotak in comparison to other companies?
The Kotak Bank share price is lower than the 2.6x average of the private banking sector at 2.2x PB, and thus it may be tempting to investors looking at the long term.
