For the September quarter, Kotak Bank reported a 51% jump in net profits to Rs.1724 crore. The growth in profit was largely driven by a 25% growth in the net interest income. The CASA ratio (ratio of low cost current and savings in total deposits) was also higher at 53.6% in the quarter. But what was most gratifying for the bank was that the net interest margins (NIM) of the bank was extremely healthy at 4.61% as against 4.19% in the September quarter last year.

The only concern was on the NPA front with the bank making higher provisions to the tune of Rs.407 crore during the quarter. The gross NPAs stood at 2.32%, slightly higher than the 2.17% figure last year. However, the doubtful assets are substantially provided for and should not post a major problem in the coming quarters. To sum it up, the NPA spillage is the only concern for the bank. Otherwise, on the growth matrices, the stock has been extremely attractive. Even the NIM growth has been noteworthy. Of course, one can argue about valuations but that is anyways being justified by growth. I suggest you hold on.