Kotak Mahindra Bank Shares Drop 4% Post Q3 Results; Valuation Concerns Emerge

• Kotak Mahindra Bank's shares fell over 4% after Q3 results, despite meeting most estimates, due to increased employee costs.
• Net Interest Income (NII) grew 5% year-on-year, but Pre-Provision Operating Profit (PPOP) growth slowed to 8% due to a ₹96 crore impact from new labor codes.
• Asset quality improved with credit cost decreasing to 0.63% and slippage ratio falling from 1.41% to 1.34%.
• Net Interest Margin (NIM) remained stable at 4.54%, missing expected improvement due to short-term liquidity management.
• Brokerages like IIFL, Nomura, and Jefferies have mixed ratings, citing valuation concerns, strong loan growth, and stable asset quality.

Why It Matters: Kotak Mahindra Bank's Q3 results saw a share drop due to higher costs, despite improved asset quality.