Kotak Mahindra Bank Q4FY26: Profit up 13%, beats estimates

Results snapshot and why it matters

Kotak Mahindra Bank reported a year-on-year rise in standalone net profit for the quarter ended March 31, 2026 (Q4FY26), supported by better asset quality and a sharp fall in provisions. Standalone profit after tax came in at ₹4,026.55 crore (₹4,027 crore rounded), up 13.4% YoY, and above the Bloomberg consensus estimate of ₹3,663 crore. The quarter also showed sequential improvement, with reported PAT growth of 17% from ₹3,446 crore in Q3FY26.

Alongside the earnings, the board recommended a dividend of ₹0.65 per equity share (face value Re 1), as per a stock exchange filing. For investors, the combination of higher profit, lower credit costs, and a dividend recommendation puts focus on the sustainability of core earnings and the direction of asset quality.

Standalone profit: key drivers in Q4FY26

Operating profit rose 7% YoY to ₹5,855 crore, indicating steady operating momentum in the quarter. Net interest income, a key measure of core banking earnings, increased 8.1% YoY to ₹7,876 crore from ₹7,284 crore in the year-ago period. The profit performance was also helped by a large decline in provisions, which reduced the drag from credit costs.

The bank reported that interest income grew 4.8% to ₹14,175 crore, while interest expense rose 0.9% to ₹6,299 crore. Other income declined 2.1% YoY to ₹3,116 crore, making the improvement in profitability more dependent on the core lending book and lower provisioning rather than fee and treasury-led gains.

Net interest margin and funding costs

Net interest margin (NIM) stood at 4.67% in Q4FY26. This was lower than 4.97% a year ago, but higher than 4.54% in the previous quarter, indicating sequential improvement. The cost of funds declined to 4.45% from 5.09% a year earlier, which is a supportive factor for margins when lending yields are under pressure.

The quarter’s NIM movement, when seen with the changes in interest income and expense, underlines that margin outcomes were shaped by both pricing and funding dynamics. Any interpretation of core profitability in Q4FY26 therefore needs to balance the YoY decline in NIM with the QoQ recovery.

Asset quality improves: GNPA, NNPA and coverage

On asset quality, gross non-performing assets (GNPA) improved to 1.20% from 1.30% in the previous quarter. Another comparison provided for the same metric showed GNPA at 1.20% versus 1.42% a year ago. Net NPA eased to 0.25%, compared with 0.31% quarter-on-quarter, and another comparison cited net NPA at 0.25% versus 0.31% in the year-ago period.

The provision coverage ratio was reported at 79%. Slippages for the quarter declined 32% year-on-year to ₹1,018 crore. Another comparison highlighted slippages at ₹1,018 crore versus ₹1,605 crore in Q3FY26 and ₹1,488 crore in Q4FY25. Together, these data points indicate moderation in new problem loans and stronger coverage.

Provisions fall sharply, lifting the bottom line

Provisions declined to ₹516 crore, down 36% QoQ, which supported Q4FY26 profitability. Another set of comparisons stated provisions and contingencies were down 43% YoY to ₹516 crore in Q4FY26, compared with ₹909 crore in Q4FY25, and down from ₹810 crore in Q3FY26.

The bank’s credit cost (annualised) for Q4FY26 was reported at 0.39%, compared with 0.64% in Q4FY25 and 0.63% in Q3FY26. Lower provisions and lower credit cost together explain a meaningful part of the gap between operating profit growth and net profit growth.

Consolidated performance alongside standalone numbers

On a consolidated basis, Kotak Mahindra Bank reported profit after tax of ₹5,423 crore for Q4FY26, up 10% YoY from ₹4,933 crore. Consolidated PAT for FY26 was ₹19,288 crore.

The bank also reported that excluding a gain of ₹185 crore on Infina Finance Private Limited divestment (after considering its carrying value in consolidated financials), PAT for Q4FY26 stood at ₹5,238 crore. On the same basis, FY26 PAT was ₹19,103 crore, compared with ₹19,113 crore in FY25 excluding gain on ZKGI divestment.

Full-year FY26: profit trend and adjustment disclosed

For the full year FY26, standalone net profit stood at ₹14,008 crore, up 2% from the previous year, while excluding gain on ZKGI divestment. Another comparison provided stated FY26 PAT of ₹14,008 crore versus ₹13,720 crore in FY25 on the same exclusion basis.

These full-year numbers suggest that while Q4FY26 was stronger on profit growth, the annual trend was more modest once the specified divestment-related gain is excluded.

Dividend recommendation: what was announced

The board recommended a dividend of ₹0.65 per equity share (face value Re 1). The announcement was made through a stock exchange filing. The disclosure in the results coverage did not provide additional details on record date or payment date.

Stock move and market context

Ahead of the results, Kotak Mahindra Bank shares rose about 0.5% on Friday to end at ₹383.75 on the NSE. Over one year, the stock has lost 12.2%, underperforming the Nifty 50, which is down 1.3% over the same period.

The near-term price move reflected positioning into the results, while the one-year performance comparison shows the stock has lagged the broader benchmark despite the quarter’s profit beat.

Key numbers at a glance

What to watch next

The Q4FY26 outcome shows higher profit supported by lower provisions and improved asset quality, while NIM remained below last year’s level despite a sequential improvement. Investors are likely to track whether the moderation in slippages and lower credit costs persists, and how margin trends evolve relative to funding costs.

The next formal updates will be linked to the company’s subsequent quarterly disclosures and any additional communication around the dividend timetable, as and when announced through filings.