India's Kotak Mahindra jumps most in 2-1/2 years as CEO sees minimal impact from RBI order
BENGALURU (Reuters) - Shares of Kotak Mahindra Bank rose as much as 5.5% on Monday, after the private lender's quarterly profit beat estimates and said there will be very little financial impact of the recent regulatory crackdown by the central bank.
Shares of the lender were last up 5.2% at 1,626 rupees after seeing its best intra-day gain since April 11, 2023.
Kotak's shares are down 14.7% so far this year - weighed down primarily by a ban by the Reserve Bank of India on adding new clients digitally and issuing credit cards - compared with a 1.7% rise in the Nifty bank index.
Kotak CEO Ashok Vaswani said during an analyst call on Saturday that the RBI's order is likely to have minimal financial impact and could affect the bank's profit before tax by about 3-4.5 billion rupees for the 2024-25 year.
The estimated impact is "encouraging," Macquarie Capital analyst Suresh Ganapathy said.
"We expect growth to remain higher than industry average despite RBI sanction," PhillipCapital analysts said in a note.
The bank on Saturday reported a 26% increase in fourth-quarter net profit, above analysts' expectations, buoyed by higher core lending income and healthy loan growth.
Beyond the near-term headwinds (on RBI ban), the bank can deliver mid-to-high teen earnings per share growth compounding over the medium term, CLSA analysts said.
(Reporting by Sethuraman NR in Bengaluru and Siddhi Nayak in Mumbai; Editing by Sohini Goswami)
