KMB, Axis Bank, IndusInd Bank shares gain up to 4%, IDFC First Bank falls 3%; here's why - BusinessToday

Shares of Kotak Mahindra Bank Ltd, Axis Bank Ltd and IndusInd Bank Ltd jumped, while IDFC First Bank Ltd fell, following their September quarter business updates. Kotak Mahindra Bank led gainers on the Nifty Bank index, rising 4.42 per cent hit a high of Rs 434.40 apiece on NSE. It was followed by Axis Bank and IndusInd Bank, which gained 1.28 per cent and 1 per cent, respectively. IDFC First Bank slipped 2.39 per cent to Rs 79.81.

In the case of Kotak Mahindra Bank, net advances grew 24.7 per cent year-on-year (YoY) and 12.7 per cent quarter-on-quarter (QoQ) to Rs 5.77 lakh crore, a major beat versus MOFSL's estimated growth of 19.4 per cent YoY and 7.9 per cent QoQ.

Deposits grew 23.2 per cent YoY and 13.7 per cent QoQ to Rs 6.51 lakh crore, also a major beat versus MOFSL's estimated growth of 17.5 per cent YoY and 8.4 per cent QoQ. CASA deposits grew 7.8 per cent QoQ and 11.3 per cent YoY, taking the CASA ratio down to 38.2 per cent from 40.3 per cent in the first quarter of FY27.

KMB's FCNR(B) deposits stood at $5.78 billion (Rs 55,000 crore), while leverage provided against the same stood at $1.68 billion (Rs 16,000 crore). Excluding FCNR(B) deposits and leverage against the same, loan growth was 21.2 per cent YoY and 9.5 per cent QoQ, while deposit growth was 12.7 per cent YoY and 4.1 per cent QoQ.

Kotak Mahindra Bank's loan and deposit growth were higher than MOFSL's estimates, while there was a sharp decline in the CASA mix. The credit-deposit ratio declined to 88.6 per cent from 89.4 per cent in the first quarter of FY27.

Axis Bank's gross advances grew 22.7 per cent YoY and 8.8 per cent QoQ to Rs 13.85 lakh crore, above MOFSL's estimated growth of 19 per cent YoY and 5.4 per cent QoQ.

Deposits rose 20.7 per cent YoY and 5.8 per cent QoQ to Rs 14.52 lakh crore, below MOFSL's estimated growth of 22.2 per cent YoY and 7.1 per cent QoQ, as a portion of FCNR(B) flows was utilised to reduce non-retail term deposits, which declined 8.6 per cent QoQ.

The bank mobilised $10.6 billion (Rs 1 lakh crore) in FCNR(B) deposits. Loans granted by its international branches against the same stood at $4.6 billion (Rs 44,000 crore). Excluding these loans, gross advances would have grown 18.8 per cent YoY and 5.3 per cent QoQ, while total deposits would have grown 17 per cent YoY and 2.6 per cent QoQ. Term deposits would have grown 21.3 per cent YoY and 3.2 per cent QoQ. Letters of credit issued against FCNR(B) deposits stood at $4.7 billion (Rs 45,000 crore).

Axis Bank's CASA deposits grew 10.6 per cent YoY and 1.5 per cent QoQ, while term deposits grew 27.3 per cent YoY and 8.4 per cent QoQ. Consequently, the CASA mix declined to 36.5 per cent from 38 per cent in the first quarter of FY27. Average deposits grew 22.5 per cent YoY and 7 per cent QoQ, while average CASA grew 13.9 per cent YoY and 2.7 per cent QoQ. Average term deposits rose 27.8 per cent YoY and 9.6 per cent QoQ.

Overall loan growth was ahead of MOFSL estimates, while deposit growth was below estimates owing to the retirement of non-retail term deposits.

Consequently, the credit-deposit ratio on gross advances rose to 95.4 per cent from 92.7 per cent in the first quarter of FY27.

IDFC First Bank Ltd IDFC First Bank reported 29.9 per cent YoY and 13.7 per cent QoQ growth in loans and advances to Rs 3.39 lakh crore, including FCNR(B) of Rs 34,400 crore. Loan growth was above MOFSL's estimate of 27.3 per cent YoY and 11.1 per cent QoQ. Excluding FCNR(B) mobilisation, advances grew 20.4 per cent YoY and 5.4 per cent QoQ.

Including FCNR(B) mobilisation, total deposits grew 25.9 per cent YoY and 11.8 per cent QoQ to Rs 3.49 lakh crore, above MOFSL's estimate of 22.9 per cent YoY and 9 per cent QoQ. Excluding FCNR(B), total deposits grew 17 per cent YoY and 3.8 per cent QoQ.

Including FCNR(B), customer deposits rose 26.9 per cent YoY and 14 per cent QoQ, with the CASA ratio at 47.6 per cent. Excluding FCNR(B), customer deposits grew 17.6 per cent YoY and 5.7 per cent QoQ.

Due to strong FCNR(B) mobilisation, bulk term deposits as a percentage of total deposits declined to 13.9 per cent from 17.1 per cent in the first quarter of FY27. LCR stood at 125 per cent. Strong credit growth resulted in an increase in the credit-deposit ratio to around 97 per cent from 95.5 per cent in the first quarter of FY27.

IndusInd Bank's net advances grew 11.1 per cent QoQ and 11.2 per cent YoY to Rs 3.62 lakh crore, above MOFSL's estimated growth of 5.7 per cent QoQ and 5.9 per cent YoY.

Deposits increased 3.4 per cent QoQ and 10.1 per cent YoY to Rs 4.29 lakh crore, while CASA declined to 28 per cent from 29.4 per cent in the first quarter of FY27. Deposit growth was below MOFSL's estimates of 6.8 per cent QoQ and 13.7 per cent YoY.

FCNR(B) mobilisation stood at $3.51 billion (around Rs 33,600 crore). Loans extended through the IBU stood at $1.73 billion (around Rs 16,600 crore), with $500 million (around Rs 4,800 crore) of SBLCs outstanding against the deposits.

Retail deposits and deposits from small business customers stood at Rs 2.15 lakh crore, compared with Rs 1.94 lakh crore in the first quarter of FY27.