DISSERTATION REPORT

ON

“ANALYSIS OF FINANCIAL PERFORMANCE

OF KOTAK MAHINDRA BANK”
(2018-2022)

SUBMITTED IN PARTIAL FULFILMENT OF THE REQUIREMENTS OF MBA

PROGRAM OF SCHOOL OF MANAGEMENT,
GD GOENKA UNIVERSITY, GURGAON

ACADEMIC SESSION
2022-2023

UNDER THE GUIDANCE OF:

Deepika Arora
Assistant Professor

SUBMITTED BY:
Kuldeep Sharma
ENROLMENT NO: 210010301066

GD GOENKA UNIVERSITY SOHNA ROAD, GURGAON – 122103,

HARYANA, INDIA

1
 DECLARATION

I, hereby, declare that report titled “Analysis of financial performance of KOTAK

MAHINDRA BANK 2018 to 2022” submitted to Assistant Professor Deepika Arora is a
record of an original work done by me under his guidance. This project work is submitted in
the partial fulfilment of the requirement for award of post graduate degree in masters of
business administration. The result embodied in this project has not been submitted to any
other institute for the award of any degree.

Signature of the student:

Name of Student: Kuldeep Sharma

Enrolment Number: 210010301066

Dated:

CERTIFICATE FROM FACULTY SUPERVISOR

2
This is to certify that Dissertation Work titled “Analysis of financial performance of Kotak
Mahindra Bank 2018 to 2022” is a Bonafede work carried out by Kuldeep Sharma,
Enrolment No. 210010301066, student of MBA Batch (2021 – 2023) of School of
Management, GD Goenka University, Gurgaon under my guidance and direction.

Signature of Guide :

Name and Designation :

Date :

Place :

ACKNOWLEDGEMENT

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It gives me immense pleasure while thank the GD Goenka University, Gurgaon, and the
faculty members of my college. They help me in different ways to complete this Research
report. Last but not the least I am very much thankful to Ms. Deepika Arora, assistant
professor for helping me throughout my research report. I wish to take the opportunity to
extend my sincere gratitude to all those who have given me their precious time and humble
guidance in the completion of my project report. During the preparation I have also received
full co-operation of my friends and family members especially by my cousins and elder
brother. Hard work and dedication are the key to any successful completion of any job and
this project is no different. Although strenuous, yet it is interesting. However, our success to
this project report cannot be accounted for by only factors. During the course of this study,
many useful suggestions and constructive criticism came across which really helped a lot in
giving this project a professional look.

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 EXECUTIVE SUMMARY
Finance is the lifeblood of the business; it is necessary from the inception of a company
through its liquidity or closing up, therefore financial institutions have played a critical part in
its functioning.

In the beginning, the banking industry was limited to accepting deposits and lending money.
A contemporary banker, on the other hand, performs a wide range of responsibilities in order
to serve their customers. Customers may take use of a variety of services that make
transactions simple and comfortable. Financial institutions, such as banks, financial service
businesses, insurance companies, securities firms, and credit unions, report financial data in a
variety of ways. It's just as tough to run a bank as it is to analyse it for investment objectives.

In this report I have made an effort to know the financial performance of Kotak Mahindra
bank over the last five financial years i.e. 2018-2022 using the tools of ratios like Current
Ratio, Earnings Per Share, Turnover Ratio, Cash Dividend Ratio, Net Interest Margin and
many more. We can say that Financial Analysis is the process to identify the financial
performance by properly establishing the relationship between items of balance sheet, profit
and loss account and cash flow statement. Thus we can say that, Financial Analysis is the
starting point for making plans before using any sophisticated forecasting and planning.

Ratio analysis is a sophisticated approach for evaluating financial information that is

extensively employed. This approach is used to evaluate a company's financial stability. It
may be used to assess the risk-reward relationship of firms of different sizes.

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 TABLE OF CONTENT

SR.NO: ITEMS

1 Title Page
2 Declaration from Student
3 Certificate from Faculty Supervisor
4 Acknowledgement
5 Executive Summary
6 Table of Content
7 List of Tables
8 List of Figures
9 Chapter 1
1.1- Introduction
1.2- Purpose of the study
1.3- Source of data
1.4- Literature review
1.5 Research Methodology
1.6 Objective of the study
1.7 SWOT Analysis
1.8 Impotance of the study
10 Chapter 2 – Organisation Profile
2.1- Comparison between kotak and Axis bank
11 Chapter 3
3.1- Analysis and Interpretation
3.2- Findings
3.3- Suggestions
3.4- Conclusion
12 Chapter 4

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 4.1- References
4.2- Appendices

CHAPTER 1-

INTRODUCTION

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Although the financial statement, which consists of the balance sheet, profit or loss account
and cash flow does not provide all information related to a firm's financial operations, it can
provide some extremely useful information to the extent that the balance sheet shows the
financial position on a specific date in terms of asset, liability, and owner's equity structure,
the profit or loss account shows the results of operations during the year and cashflow shows
the source of cash and helps you monitor incoming and outgoing money. Incoming cash for a
business comes from operating activities, investing activities and financial activities. As a
result, the financial statements will give a consolidated perspective of the company. As a
result, comprehensive evaluation of useful reports and statements via financial analysis or
ratio is necessary in order to understand about the organisation.

Meaning and Definition:

The banking sector is the heart of all economic activities of a country and a small change in
its regulation may affect the entire economy. The banks are the institutions that directly hit
the economy and affect their performance for better or worse. Banks play a crucial role in
“Capital Formation”, which is important for the economic development of a nation.They
gather the idle saving of the people and make them available for investment. They also create
new demand deposits within the process of granting loans and buying investment securities.

Financial performance is a complete evaluation of a company’s overall standing in categories

such as assets, liabilities, equity, expenses, revenue and overall profitability. It is measured
through various business-related formulae that allow users to calculate exact details regarding
a company’s potential effectiveness. Financial analysis establishes a relationship between the
items of the balance sheet, profit and loss account and other financial data in ascertaining the
financial strengths and weakness of the firm. It also refers to the study of the trend of
financial factors in a business, which is appeared in a series of statements. Financial
statement analysis covers both analysis and interpretation. The purpose of the financial
statement analysis is to discover the information contained in the financial statements, so as
to access the profitability and financial soundness of the firm.

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  RATIO ANALYSIS:
Ratio analysis is one of the powerful techniques which are widely used for interpreting
financial statements. This technique serves as a tool for assessing the financial soundness of
the business. It can be used to compare the risk and return relationship of firms of different
sizes. The term ratio refers to the numerical or quantitative relationship between two items/
variables.

The idea of ratio analysis was introduced by Alexander Wall for the first time in 1919. Ratios
are quantitative relationship between two or more variables taken from financial statements.

Ratio analysis is defined as, “the systemic use of ratio to interpret the financial statement so
that the strength and weakness of the firm as well as its historical performance and current
financial condition can be determined. In the financial statement we can find many items are
co-related with each other for example current assets and current liabilities, capital and long-
term debt, gross profit and net profit purchase and sales etc.

CLASSIFICATION OF RATIOS:

1. Profitability Ratios
 Ratio of profit to total income
 Ratio of profit to deposits
 Return on equity
 Return on Capital
 Ratio of return on assets
 Net interest margin
 Ratio of interest income to average working fund
 Ratio of non-interest income
 Cash dividend
 EPS
2. Operating Ratios
 Ratio of interest earned to interest paid
 Ratio of interest paid to total income
 Ratio of staff expenses to total expenses
 Ratio of total expenses to total income.

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  Ratio of operating expenses to average working fund
 Ratio of interest expenses to average working fund
3. Solvency ratios
 Ratio of cash to deposit
 Ratio of investment to deposits
 Credit deposit ratio
 Ratio of fixed assets to net worth
 Current assets ratio
 Quick ratio
 Fixed assets ratio
4. Safety Ratios
 Ratio of net NPA to net advance
 Capital adequacy ratio

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 PURPOSE OF THE STUDY

The study is limited to KOTAK MAHINDRA BANKand the data is been analysed for 5
years and interpreted from the information available in the financial statements. The study
aims at analysing the overall financial performance of the Kotak Mahindra Bank by using
financial tools. This study focuses on the financial performance of Kotak Mahindra Bank and
it helps in estimating the future usefulness of banks to make a decent profit out of it.

A bank’s balance sheet, income statement and cash flows are valuable information sources
for identifying risk taking and assessing risk management effectiveness. Although amounts
found on these statements does not provide valuable insights into performance so ratio
analysis is required for determining the good or bad performance of the bank and also for
determining its causes. The study includes the calculation of different financial ratios. It
compares three years of financial statements of the company to know its performance in these
different years.

• To know the financial performance of the organization

 To study different ratios in Kotak Mahindra bank.

 To determine the profitability and liquidity of the bank through ratios analysis.
 To compare the present and previous year’s performance of Kotak Mahindra
bank.

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 STATE OF THE PROBLEM

The state of the problem for a financial analysis of Kotak Mahindra Bank could include:

A financial analysis of Kotak Mahindra Bank has been carried out in this study. This study is
conducted to analyse and interpret the financial performance and the current position of
KOTAK MAHINDRA BANK for the past five years (2017-2021). To find and understand the
stability of deposits and advances of KOTAK MAHINDRA BANK.
 What is the trend in the financial performance of Kotak Mahindra Bank over the past
few years? Are there any areas of concern or potential growth?
 How have external factors such as regulatory changes, economic conditions, and
market trends impacted the financial performance of Kotak Mahindra Bank?
 How does the financial performance of Kotak Mahindra Bank compare to other banks
in the same industry or region?
 What is the profitability, liquidity, solvency, and overall financial health of Kotak
Mahindra Bank?
 What are the potential risks or challenges faced by Kotak Mahindra Bank, and how
does it manage these risks?
 How is Kotak Mahindra Bank's capital structure, and what is its ability to raise capital
if needed?
 How does Kotak Mahindra Bank's digital capabilities and readiness to compete in the
evolving digital banking landscape?

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 REVIEW OF LITERATURE

Review of literature aims to summarize major studies that have been published on the topic.
It provides theoretical knowledge on the selected topic.
Empirical Literature

Empirical literature deals with past research studies which includes facts and figures
identified through various experiments.
John Alan Thomas and Kumar John Pradeep (2022) According o their research, the
profitability of the selected institutions is relatively decent. HDFC, ICICI Bank and
Kotak Mahindra Bank are the finest private sector banks to invest in among the
selected banks since they retain a superior position in terms of profitability, solvency,
and stock valuation. The bank's asset quality and financial stability are also
satisfactory. For the past five years, bank non performing assets (NPAs) have been on the
rise. Banks have been able to progressively recover from the bad effects of the Covid-19
outbreak due to government and RBI interventions. Considering the above information,
investors can consider investing in HDFC Bank ICICI Bank and Kotak Mahindra Bank
Tarawneh, (2006) ), the authors have made the study in the topic, Described the nature of the
organization influences the ratios employed. For example, in the case of a bank, the liquidity
ratio is used to determine the amount of liquidity that a bank needs in order to meet its
liabilities; a bank also uses profitability ratios.
Brigham and Ehrhardt (2010)Stated “financial ratios are designed to help evaluate
financial statements”.Financial ratios are used as a planning and control tool. Financial ratios
analysis is used to evaluate the performance of an organization: it aims to determine the
strong and weak points and it offers solutions by providing appropriate plans.
Dangwal and Kapoor (2010) ), the authors have made the study in the topic, They conducted
research on the financial performance of India's nationalised banks and evaluated the growth
index value of key characteristics using overall profitability indicators. They discovered that
four banks performed exceptionally well, five banks performed well, and six banks
performed poorly. As a result, the performance of nationalised banks varies greatly.
DR. G. LAKSHMI AND ETAL (2021), the authors have worked on the paper, “Financial
Analysis of City Union Bank” stating that the banking sector is always deemed to the vital
sector of the economy. It is the lifeblood of all economic activities, in collecting deposits and
providing credits to people and businesses. The main purpose of this study is to study the
financial performance of the City Union Bank. This study is analytical in nature. Secondary
data has been used in this study. Secondary data is collected from annual reports of City
Union Bank, journals and books. The collected data has been analysed using common-size
balance sheet and trend analysis. The study concludes that the CUB’s financial performance
is strong during the study period.

13
Kumar B.Satish(2008), ), the authors have made the study in the topic, in this article on an
evaluation of the financial performance of Indian private sector banks wrote Private sector
banks play an important role in development of Indian economy. After liberalization the
banking industry underwent major changes. The economic reforms totally have changed the
banking sector. RBI permitted new banks to be started in the private sector as per the
recommendation of Narashiman committee. The Indian banking industry was dominated by
public sector banks. But now the situations have changed new generation banks with used of
technology and professional management has gained a reasonable position in the banking
industry.

Chaudhary Kajal and Sharma Monika (2011) ), the authors have made the study in the
topic ,“Performance of Indian Public Sector Banks and Private Sector Banks: A Comparative
Study” concludes that an efficient management information system should be developed. The
bank staff involved in sanctioning the advances International Journal of Commerce and
Management Research should be trained about the proper documentation and charge of
securities and motivated to take measures in preventing advances turning into NPA. Public
banks must pay attention on their functioning to compete private banks. Banks should be well
versed in proper selection of borrower/project and in analyzing the financial statement. Anita
Makkar, Shveta Singh, (2013)2 , “Analysis of the financial performance of Indian
commercial banks: a comparative study”, financial performance of the banks indicates the
strength and weakness of that particular bank by properly establishing the associations
between the items in the balance sheet and the profit and loss account. The study considered a
sample of 37 banks (22 public se tor and 15 private sector) from the period 2006-2007and
2010-2011. Jha and Sarangi (2011)3 analyzed the performance of seven public sector and
private sector banks for the year 2009-10. They used three sets of ratios, operating
performance ratios, financial ratios, and efficiency ratios. In all eleven ratios were used. They
found that KOTAK MAHINDRA BANK took the first position, followed ICICI Bank, BOI,
PNB, SBI, IDBI, and HDFC, in that order.

Pawan, Gorav 2016: The study entitled to compare financial health ICICI Bank and Axis
Bank. Objective of the study was to measure and compare financial performance of Axis an
ICICI Bank. The study conclude that the performance of Axis Banak is better compare to
ICICI Bank.
Jha Priyanka 2018): A study Examined the financial performance of public sector bank
(PNB) and private sector bank (KOTAK MAHNDRA Bank) in India. Objective of study was

14
to compare financial performance of both banks. Study concludes that KOTAK bank
Performed better PNB in comparison.
Dr Mukund Sharma 2014: Conducted a study to investigate financial performance
of Indian public and private sector bank based on CAMEL FRAME WORK. The
study stated that private banks are better than public sector banks.
Kumar Pakira Sanjib 2016: the authors have made the study in the topic,Examines his
research growth performance analysis a comparative study between SBI and KOTAK
Bank Limited. His objective was to analysis the growth rate in SBI and KOTAK Bank
limited as both the banks are giant banks in public and private sector. In this research
work the researcher found that KOTAK Bank has performed much better than the SBI
Bank.
(Dr Ahmed Arif Almazari 2012): ), the authors have made the study in the
topic,This study attempts basically to measure the financial performance of the
Jordanian Arab commercial bank for the period 2000-2009 by using the DuPont
system of financial analysis which is based on analysis of return on equity model.
Arab bank had less financial leverage in the recent years, which means the bank is
relying less on debt to finance its assets.
B. Kereta Befekadu 2007: the authors have made the study in the topic,This study
examines that the industry’s outreach rises in the period from 2003 to 2008 but the
MFIs reach the very poor. The study finds that the MFIs are operational sustainable
and also financially sustainable. 16. (Aminul Islam 2014)16:This study investigates
the financial performance of National Bank Limited with in the period 2008 to
2013.This study also determine specific areas for bank to work to attain sustainable
growth.

SASIKUMAR BALI AND ETAL (2021), the authors have made the study in the
topic "A comparative study on Financial Wealth and Performance of HDFC Bank and
Kotak Mahindra Bank", RBI is the head to rule the banking sectors in India. HDFC
and Kotak Mahindra Bank are the two major player in private sector banks in India.
Due to pandemic situation banking sectors faced big challenge. This study is used to
analyze the financial wealth and performance of HDFC and Kotak Mahindra Bank
and to compare it. Ratio analysis for comparative balance sheet analysis and common
size balance sheet analysis are used to interpret the financial statement of these two
banks
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 RESEARCH METHODOLOGY
The main aim of the study is to analyse the financial statements of kotak Mahindra Bank
by using secondary data available in the annual reports published in official websites of
kotak Mahindra bank or in the BSE website.

Data collection methods-

Secondary data:

• Kotak Mahindra Bank annual report.

• Kotak Mahindra Bank balance sheet and income statement for past ten years.

• Company website - www.kotak.com • Other websites - Ibef.org,

www.moneycontrol.com, www.bseindia.com, www.google

RESEARCH DESIGN

Nature of the study

Study is analytical in nature, meaning that it deals primarily with secondary data
collected

from the KOTAK MAHINDRA Bank’s financial statements over the last five years.

Nature of Data

The data used is secondary in nature. Secondary data are those data which have already

been collected and stored.

Sources of data

 The dissertation report focuses on the financial analysis of Kotak Mahindra Bank
from 2018 to 2022.
 Data for the report has been collected from secondary sources.
 The executive summary provides an overview of the report and its objective.
 The introduction highlights the importance of financial statements and ratios in
understanding a company's financial position.

16
  Various financial ratios such as profitability ratio, operating ratio, solvency ratio,
and safety ratio have been explained using information from reliable secondary
sources like Investopedia.com.
 The ratios have been calculated to analyze the financial position of Kotak
Mahindra Bank.
 The company's profile, history, and products offered have been obtained from the
Kotak Mahindra Bank website and Wikipedia.
 Information on Kotak's capital structure has been gathered through secondary
data.
 Links and sources of data used in the report have been provided in the last section
to ensure credibility and proper referencing.
 The data used in the report is collected from reliable secondary sources, and
appropriate references have been given for each source used.

Period of Study

The study on financial performance of KOTAK MAHINDRA BANK is confined to a

period of five years from 2018to 2022. It took 3 weeks to collect the data and come to a
conclusion on the study.

Research on facts:
• Research secondary data like Moneycontrol, Kotak Mahindra Bank website and other related
websites.
• Using a research paper to find information like a literature review and evaluate the performance of
Kotak Mahindra bank.
• This project will also use the ratios like solvency and operational to evaluate the bank profit and
current position of the bank.

Data Collection Method:

➢ Secondary Data
Secondary Data:

Secondary Data Under Secondary sources, information was collected from internal & external
sources. I made use of Internet and miscellaneous sources (such as Company websites and their
financial reports) under external sources.

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 Objectives of the study:
 To evaluate the financial performance of Kotak Mahindra Bank over the past five
years and identify any trends or patterns.

 To compare the financial performance of Kotak Mahindra Bank with other banks in
India and the Asia-Pacific region.

 To assess the impact of regulatory changes, economic conditions, and market trends
on the financial performance of Kotak Mahindra Bank.

 To analyze the profitability, liquidity, solvency, and overall financial health of Kotak
Mahindra Bank.

 To identify any potential risks or challenges faced by Kotak Mahindra Bank and
assess its risk management practices.

 To evaluate the capital structure of Kotak Mahindra Bank and assess its ability to
raise capital if needed.

TOOLS USED FOR ANALYSIS

 TREND ANALYSIS: Trend analysis helps the future forecasts of various items. For
calculation of trend Base year is assumed to be equal to 100 and on the basis the
percentage of item of each year calculated.
 RATIO ANALYSIS: Ratio analysis is one of the techniques used to analyse the
financial statement. It is the process of establishing and interpreting various ratios
(quantitative relationship between figures and group of figures). Ratio analysis helps
in analysing financial statement and decision making.
 SWOT Analysis

LIMITATIONS OF THE STUDY

 Data of this study is based on secondary data collected from the bank website.

 This study is limited to KOTAK MAHINDRA BANK.

 This study is limited to a period of five years only i.e., 2018-2022.

 The data collected only limits to report of the bank.

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 ANALYSIS AND INTERPRETATION
1. Trend analysis Kotak Mahindra Bank Trend Analysis is a useful technique to an
analyst to predict future trend based on observed trend data. The primary components
of the bank i.e., DEPOSITS and ADVANCES are analysed using this trend.
The formula for calculating Trend Trend Percentage = Current year’s figure / Base
year’s figure * 100 Procedure for calculating Trend The Trend Analysis Formula can
be calculated by using the following steps:
Step 1: Firstly, decide the base year.
Step 2: Next, note down the value of the line item in the current year.
Step 3: Now, the formula for trend analysis is applied.

Year Deposit Amount (In crores) TREND PERCENTAGE

2018 1,57,426 100%
2019 1,92,643 122.37%
2020 2,25,880 143.48%
2021 2,62,821 166.95%
2022 2,80,100 177.92%

Deposit Analysis
300000 280,100
262,821
250000 225,880
200000 192,643
157,426
150000

100000

50000
2018
100.00% 2019
122.37% 2020
143.48% 2021
166.95% 2022
177.92%
0
1 2 3 4 5

Year Deposit Amount (In crores)

TREND PERCENTAGE

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 Year Advances Amount TREND PERCENTAGE
2018 1,36,082 100%
2019 1,69,718 124.72%
2020 2,05,695 151.15%
2021 2,19,748 161.48%
2022 2,23,689 164.37%

Advances analysis
250000

200000

150000

100000

50000

0
1 2 3 4 5

Year Advances Amount TREND PERCENTAGE

INTERPRETATION
The above Table shows Deposits and Advances analysis using trend. The deposits have
continuously increased in all the years up to 2022. The percentage in 2022 is 177.92% as
compared to 100 during the base year 2017, The increase indeposits is quite satisfactory. The
figures of advances have also increased in all the years, i.e., years. The increase in both the
deposits and advances are almost parallel to each other. The trends of both the deposits and
advances show that,both have been more in all the years since 2018 i.e., an upward trend
from 2018 to 2022. The increase in advances is more in the year 2021 and 2022 as compared
to the earlieryears.

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 SWOT ANALYSIS

STRENGTHS
 Financial Products
 Diversified Business Model
 Customer Service
 Strong Fundamentals and Management

WEAKNESSES
 Poor Marketing
 Less Corporate Banking
 A new enterprise
 Limited IVR License

OPPORTUNITIES
 Presence of Asset Management
 Increase in banking demand
 Overseas Expansion
 RBI Act

THREATS
 Increasing Competition in Finance Sector
 Economic Slowdown
 Banking Norms

INTERPRETATION
These were the strengths, weaknesses, opportunities, and threats of Kotak Mahindra Bank,
India’s third largest private sector bank with a market capitalization of 397,000 Crore INR.
Kotak Mahindra is already topping the chart because of its excellent customer services and
top management teams but still, there are some factors that the bank has to scrutinize on such
as poor marketing and being less active in corporate banking. So, this was the SWOT
Analysis of Kotak Mahindra Bank.

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 IMORTANCE OF THE STUDY
The study of financial analysis of Kotak Mahindra Bank from 2018 to 2022 is important for
several reasons. Firstly, it provides insights into the bank's financial performance over the
past five years, including its revenue, profitability, liquidity, and solvency. This information
can be useful for investors and other stakeholders in assessing the bank's financial health and
making informed decisions about investing in the bank.

 It helps investors and stakeholders assess the bank's financial health and make
informed decisions about investing in the bank.
 Analyzing the financial statements can identify trends and patterns in financial
performance, which can be used to forecast future performance.
 This information can help the bank's management team develop strategies to improve
financial performance and achieve business objectives.
 A financial analysis can also identify potential risks and challenges that the bank may
face in the future.
 This information can be used to develop risk management strategies and contingency
plans to mitigate the impact of any potential challenges.
 The study of financial analysis of Kotak Mahindra Bank from 2018 to 2022 is
important for understanding financial performance, identifying trends, forecasting
future performance, and managing risks.

22
 CHAPTER 2-
ORGANISATION PROFILE

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In 1985, Uday Kotak founded Kotak Capital Management Finance as an investment and
financial services company, with a loan of ₹30 lakh from family and friends.In 1986, Anand
Mahindra and his father Harish Mahindra invested ₹1 lakh in the company and it was
subsequently renamed as Kotak Mahindra Finance. The company was initially engaged in bill
discounting, along with lease and hire purchase activities.

In the early 1990s, the company started car financing and investment banking services, and
expanded its operations overseas. In 1996, car financing company Kotak Mahindra Primus
was incorporated as a 60:40 joint venture between Kotak Mahindra Finance and Ford Credit
International. In the same year, Kotak Mahindra Finance hived off its investment banking
division into a new company, Kotak Mahindra Capital, started in partnership with Goldman
Sachs.

In February 2003, Kotak Mahindra Finance received a banking licence from the Reserve
Bank of India. With this, it became the first non-banking finance company in India to be
converted into a bank. Kotak Mahindra Finance was then renamed as Kotak Mahindra Bank.
At the time, Uday Kotak had 56% stake in the company while Anand Mahindra held 5%

Kotak Mahindra Bank has a strong presence in the retail, corporate and investment banking
segments, and it operates through a network of 1,603 branches and 2,519 ATMs across the
country, as of March 2021. The bank also has international offices in Dubai, London, New
York, Singapore, and Mauritius.

The bank has received several awards and recognitions for its performance and innovation,
including the Best Bank in India award by FinanceAsia, Best Private Sector Bank award by
Outlook Money, and Best Digital Bank award by Business Today.

BROAD AREAS IN WHICH IT OPERATES:

Kotak Mahindra Bank operates in several areas:

 Retail banking
 Corporate banking
 Investment banking
 Wealth management
 Asset management
 Life insurance

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Retail Banking:

This segment collects deposits from consumers, makes loans, and provides customer advisory
services. The Retail Bank's goal is to offer a wide range of financial products and banking
services to its target market clients, offering them a one-stop shop for all of their banking
needs. The products are supported by service and supplied to consumers via the bank's
expanding branch network as well as other delivery channels such as automated teller
machines (ATMs), phone banking, online banking, and mobile banking.

Corporate Banking:

Working Capital Finance: This includes various types of credit facilities such as cash credit,
overdraft, letter of credit, bank guarantee, and other short-term loans to help corporates
manage their day-to-day operations.

Trade Finance: Kotak Mahindra Bank provides a range of trade finance services such as
import and export finance, supply chain finance, and other trade-related services.

Corporate Loans: The bank offers a variety of corporate loans such as term loans, project
finance, and structured finance to help corporates meet their long-term financing
requirements.

Cash Management Services: The bank offers various cash management services such as
collections and receivables management, payables management, and liquidity management to
help corporates manage their cash flows effectively.

Treasury Services:

Kotak Mahindra Bank provides a range of treasury services including foreign exchange,
money market, and derivative products to help corporates manage their forex and interest rate
risk.

25
MISSION:

Kotak Mahindra Bank's mission is to be “Our customers will enjoy the benefits of dealing
with a global Indian brand that best understands their needs and delivers customised
pragmatic solutions across multiple platforms. We are a world-class Indian financial services
group.”

OBJECTIVES:

The goal is to develop strong client franchises across various industries in order to become
the chosen provider of banking services, there are various objectives of kotak Mahindra to
provide a well services to their cutomers and become number one;

 Customer satisfaction: Kotak Mahindra Bank aims to provide exceptional service to its
customers and understand their needs to offer tailored solutions.
 Innovation: The bank invests heavily in technology and digitalization to introduce new products
and services that meet the evolving needs of customers.
 Financial growth: Kotak Mahindra Bank aims to achieve sustainable financial growth while
maintaining financial discipline and managing risks effectively.
 Corporate responsibility: The bank is committed to being a responsible corporate citizen and
making a positive impact on the communities it serves.
 Employee engagement: The bank provides opportunities for learning and development and
encourages its employees to innovate and contribute to the growth of the bank.

BUSINESS STRATEGY:

 Increase our market share in India's rapidly growing banking and financial services
business by adhering to a disciplined growth plan and providing superior customer
service.
 Utilize our technological platform and open, scalable systems to provide more items
to more clients while maintaining cost management.
 Maintain our present high asset quality standards through rigorous credit risk
management;
 Develop new products and services that appeal to our target clients while also
addressing inefficiencies in the Indian financial industry.
 Continue to develop goods and services that lower our cost of capital, and concentrate
on steady profits growth with little volatility.

26
 CAPITAL STRUCTURE:

Authorized capital of Kotak Mahindra Bank is Rs.1400 crore (Rs.14 billion) in 2021-22. The
paid-up capital is Rs.992.33 crore (Rs.9.9 billion).

Shareholding Patterns- kotak mahindra bank

Holder's Name No of Shares % Share Holding
NoOfShares 1986556582 100%
Promoters Foreign Institu-
Promoters 515504681 25.95% 1026 tions
Foreign Institutions 783310983 39.43% 9%
11
4%%% MutualFunds Others
% 39
MutualFunds 218361346 10.99% % GeneralPublic Financial Insti-
tutions
Others 88515260 4.46%
GeneralPublic 175118324 8.82%
Financial Institutions 205745988 10.36%

Various Services:

1. Forex and Trade Services:

Kotak Mahindra Bank offers a range of forex and trade services to cater to the needs
of its customers. These services include foreign currency accounts, remittances,
foreign currency loans, and forex cards, among others. The bank also provides trade
services such as import and export financing, trade finance, and letters of credit.
These services are designed to make international trade transactions easier and more
efficient for customers, while also ensuring compliance with regulatory requirements.

2. Loans:

Kotak Mahindra Bank offers a range of loan products to meet the diverse needs of its
customers. Some of the loan products offered by the bank are:

 Personal Loan: This loan is offered to individuals to meet their personal needs such as home
renovation, travel expenses, medical expenses, etc.
 Home Loan: This loan is offered to individuals to purchase a new home, construct a new home
or to renovate an existing home.
 Business Loan: This loan is offered to businesses to meet their working capital requirements, to
expand their business or to purchase new equipment.
 Car Loan: This loan is offered to individuals to purchase a new car or a used carEducation Loan:
This loan is offered to individuals to pursue higher education in India or abroad.

27
 Loan Against Property: This loan is offered to individuals by keeping their property as collateral.
This loan can be used for personal or business purposes.

3. Personal Banking:

 Savings Account:
These accounts are primarily intended to instil a feeling of saving for the future by
building up cash over time. Whatever the customer's profession, the bank is
convinced that they will discover the ideal banking solution. Create an account in
your own name (customer's name) or one with a family member now.
 Current Account:
Experience the freedom of multi-city banking with an HDFC Bank Current Account!
Customers may access their accounts from any of the bank's 5500 branches in 2764
cities, giving them the capability of multi-location access. Not only that, but he can do
most of his banking transactions without leaving his workplace or home.
HDFC Bank recognises that operating a business takes time and money, as well as the
fact that clients' business demands are continuously changing. This is where it comes
into play. It gives him a variety of Current Account alternatives that are tailored to his
company's needs, regardless of its size or scope.
 Fixed Deposits:
Long-term investments are an important part of everyone's future ambitions. Fixed
deposits are an alternative to traditional loans since they allow the customer to borrow
from his own money for a certain length of time, allowing him to meet his demands
while keeping his investments safe.
As of September 10, 2004, all fees and charges included in the Tariffs, Charges, or
Fees Brochures will be subject to Service Tax of 10% and Education Cess of 2% of
the service tax amount, as per the Finance (No 2) Act 2004. In the statements, the
same will appear as distinct debits.

28
  Private Banking:
High-net-worth individuals and institutions can use HDFC Bank's Private Banking
services. The bank's team of seasoned financial and investment specialists offer
impartial advice supported by rigorous research and in-depth analysis, all while
keeping the customer's financial objectives in mind.

4. Mutual Fund Products Schemes:

 Equity Funds: These funds invest primarily in equity and equity-related instruments. Kotak
Standard Multicap Fund, Kotak Emerging Equity Fund, Kotak Small Cap Fund, and Kotak Equity
Opportunities Fund are some of the popular equity funds offered by Kotak Mahindra Mutual
Fund.

 Debt Funds: These funds invest primarily in debt and money market instruments. Kotak
Corporate Bond Fund, Kotak Banking and PSU Debt Fund, and Kotak Dynamic Bond Fund are
some of the popular debt funds offered by the fund house.

 Hybrid Funds: These funds invest in a mix of equity and debt instruments. Kotak Equity Hybrid
Fund, Kotak Balanced Advantage Fund, and Kotak Asset Allocator Fund are some of the popular
hybrid funds offered by Kotak Mahindra Mutual Fund.

 Tax Saving Funds: These funds offer tax benefits under Section 80C of the Income Tax Act, 1961.
Kotak Tax Saver Fund is a popular tax-saving fund offered by Kotak Mahindra Mutual Fund.

 Exchange Traded Funds (ETFs): These funds track the performance of a particular index and
trade on the stock exchange like a stock. Kotak Nifty ETF, Kotak Banking ETF, and Kotak PSU Bank
ETF are some of the popular ETFs offered by Kotak Mahindra Mutual Fund.

Kotak Mahindra Mutual Fund provides customized investment solutions to its customers
based on their investment goals, risk appetite, and investment horizon. The fund house also
offers various features such as Systematic Investment Plans (SIPs) and Systematic
Withdrawal Plans (SWPs) to help investors meet their financial goals.

29
5. Payment Services:

 Kotak Net Banking:

Kotak Mahindra Bank's net banking service enables customers to access their accounts online
and make transactions from the comfort of their homes or offices. With this service,
customers can transfer funds, pay bills, and manage their accounts easily.

• Kotak Payment Gateway:

Kotak Payment Gateway is a secure and reliable payment processing solution that allows
businesses to accept payments online. It provides multiple payment options, including credit
cards, debit cards, and net banking.

• Kotak Bharat QR:

Kotak Bharat QR is a quick and secure way to make payments using a smartphone. It allows
customers to make payments by scanning a QR code using their mobile phone camera. This
service is accepted at all merchants that display the Bharat QR logo.

• Kotak FASTag:

Kotak FASTag is an electronic toll collection system that enables customers to pay tolls
without stopping at toll booths. It is a sticker that is affixed to the windshield of a vehicle and
is linked to the customer's prepaid account.

• Kotak Mobile Banking:

Kotak Mobile Banking allows customers to access their accounts and make transactions using
their mobile phones. It provides a range of services, including fund transfer, bill payment, and
account management.

30
6. Kotak 811:

Kotak 811 is a digital savings account offered by Kotak Mahindra Bank in India. It is a zero
balance account that can be opened online using the Kotak Mobile Banking app or website.
Here are some features of Kotak 811:

• Digital Account Opening:

Customers can open an account instantly using their Aadhaar number and PAN card. No
physical documents or branch visits are required.

• Zero Balance Account:

Kotak 811 is a zero balance account, which means customers do not need to maintain a
minimum balance.

• Virtual Debit Card:

Upon opening the account, customers receive a virtual debit card that can be used for online
transactions. A physical card can be requested if needed.

• High Interest Rates:

Kotak 811 offers higher interest rates compared to traditional savings accounts. Customers
can earn up to 4% interest on their savings.

• Mobile Banking App:

Kotak 811 comes with a mobile banking app that allows customers to manage their accounts,
transfer funds, pay bills, and make investments.

• Additional Features:

Customers can also avail additional features such as mobile banking alerts, net banking
facilities, and free NEFT and IMPS transactions.

31
 COMPARISON BETWEEN KOTAK AND AXIS BANK

 Profitability: Kotak Mahindra Bank has consistently outperformed Axis Bank in terms of
profitability. Kotak Mahindra Bank's net profit margin has been higher than Axis Bank's over the
past five years.
 Asset quality: Both banks have maintained a healthy asset quality, but Kotak Mahindra Bank has
been able to maintain a lower level of non-performing assets (NPAs) compared to Axis Bank.
 Loan growth: Kotak Mahindra Bank's loan growth has been consistently higher than that of Axis
Bank. Kotak Mahindra Bank has been able to grow its loan book at a faster pace without
compromising on the quality of assets.
 Capital adequacy: Both banks have maintained adequate levels of capital adequacy ratio (CAR)
as per regulatory requirements. However, Kotak Mahindra Bank has a higher CAR than Axis
Bank, indicating a stronger balance sheet.
 Valuation: As of May 2023, Kotak Mahindra Bank has a higher price-to-earnings (P/E) ratio than
Axis Bank, which suggests that investors are willing to pay a premium for Kotak Mahindra Bank's
higher earnings growth potential.

Kotak Mahindra Bank AXIS BANK

32
 CORPORATE GOVERNANCE:

Corporate Governance provides a framework for attaining the Bank’s objectives and encompasses
practically every sphere of Management from action plans and internal controls to performance
measurement, ethics and corporate disclosures. Good Corporate Governance helps to build trust with
the investors and the community and also helps in creating and enhancing long term sustainable value
for all its stakeholders.

The Bank believes that Corporate Governance is a reflection of its value system, encompassing its
culture, policies and its relationship with the stakeholders such as shareholders, regulators, employees,
customers, vendors, government and the community at large. It is a system of practices, processes and
rules which directs the affairs of an organisation in an efficient manner and helps it to maximise value
for its stakeholders. It essentially involves balancing the interests of an organisation with that of its
various stakeholders. Corporate Governance is more than just adherence to the regulatory and
statutory requirements. It is equally about focusing on the voluntary practices that underlie the highest
levels of transparency.

Sr.No Name of Directors Category of directorship

1 Mr. Prakash Apte (Part-time Chairman)3 Independent Directors
2 Mr. Uday Khanna
3 Ms. Farida Khambata
4 Mr. Uday Shankar
5 Dr. Ashok Gulati
6 Ms. Ashu Suyash
7 Mr. C. Jayaram Non-Executive Directors
8 Mr. Amit Desai
9 Mr. Uday Kotak, Managing Director & CEO Executive Directors
10 Mr. Dipak Gupta, Joint Managing Director
11 Mr. KVS Manian, Whole-time Director
12 Mr. Gaurang Shah, Whole-time Director

33
 CHAPTER 3-

ANALYSIS AND INTERPRETATION

34
I. PROFITABILITY RATIO:

This ratio demonstrates an organization's ability to make money. The firm's operating
efficiency and capacity to provide a sufficient return to its shareholders are ultimately
determined by the profits it generates. The profitability ratio can be used to determine a
company's profitability. In other words, profitability ratios are meant to answer queries like

a) Is the firm's profit adequate?

b) What is the expected rate of return?

b) What is the profit rate for the company's various divisions and segments?

c) What is the rate of return on equity for equity investors?

The Profitability of the firm can be interpreted by the following ratios:

1. Net Profit Ratio:

This ratio implies the percentage of profit earned by the organization from its total revenue.

(Net Profit/ Total Revenue) × 100

(In crores)
Year 2022 2021 2020 2019 2018
Net
12,089 9,990 8,593 7,204 6,201
Profit
Total
59,051 56,048 50,366 45,979 38,813
Revenue
Ratio 20.47% 17.82% 17.06% 15.67% 15.98%

35
 70,000
59,051
60,000 56,048
50,366
50,000 45,979
38,813
40,000

30,000

20,000
12,089 9,990 8,593 7,204 6,201
10,000
20.47% 17.82% 17.06% 15.67% 15.98%
0
2022 2021 2020 2019 2018

Net Profit Total Revenue Ratio

Interpretation:
The ratio of Net Profit Ratio has been increasing at a constant rate for the past 5 years, due to
increase in income from investments and interest income.

2. Return on Equity:
The return on equity (ROE) is a financial performance indicator that is computed by dividing
net income by shareholders' equity. Because shareholders' equity equals a company's assets
less its debt, the return on net assets is referred to as ROE. The return on equity (ROE) is a
measure of a company's profitability and efficiency in generating profits.

Year 2022 2021 2020 2019 2018

Net Income 59,051 56,048 50,366 45,979 38,813

Shareholder's
97,165.34 84,838.61 67,136.99 58,281.80 50,488.23
Equity

ROE 60.7737286 66.06426 75.01975 78.89084 76.87534

36
 Chart Title
110000
90000
70000
50000
30000
10000
1 2 3 4 5
Year 2022 2021 2020 2019 2018
Net Income 59051 56048 50366 45979 38813
Shareholder's 97165.34 84838.61 67136.99 58281.8 50488.23
Equity
ROE 60.7737285744073 66.0642601287315 75.0197469383122 78.8908372768171 76.8753430254933

Year Net Income Shareholder's Equity ROE

Interpretation:
The ROE of Kotak Mhindra bank has been Decreasing for the past couple of years. The
return on equity is a metric that assesses both profit and efficiency. A growing ROE indicates
that a corporation is generating more profits while using less capital. It also shows how
successfully a company's management manages shareholder funds.

3. Return on Assets:
Return on assets (ROA) is a financial statistic that shows how profitable a business is in
comparison to its total assets. ROA is a metric that may be used by corporate management,
analysts, and investors to measure how well a firm uses its assets to create profit.
Using a company's net income and average assets, the measure is often stated as a percentage.
A greater return on assets implies that a corporation is more effective and productive in
managing its balance sheet to create profits, whilst a lower ROA suggests that there is still
space for development.
Return on Assets=Total Assets/Net Income
Year 2022 2021 2020 2019 2018
Net
59,051 56,048 50,366 45,979 38,813
Income
Total
4,79,043.77 4,79,043.77 4,43,336.93 3,95,376.97 3,37,720.47
Assets
ROA 8.11237354 8.54702701 8.80230572 8.59907719 8.70122047

37
 Chart Title
500000
450000
400000
350000
300000
250000
200000
150000
100000
50000
0
1 2 3 4 5

Year Net Income Total Assets ROA

Interpretation:
As we can see the ROA of Kotak Mahindra bank has been increasing at a minimal rate and is
in good condition it shows that the assets are efficient and the company is able to earn more
money with smaller investments.

4. Return on Capital employed (ROCE):

The return on capital employed (ROCE) is a financial measure that may be used to evaluate
the profitability and capital efficiency of a firm. To put it another way, this ratio can assist in
determining how successfully a corporation generates profits from its capital when it is
deployed.
When evaluating a firm for investment, financial managers, stakeholders, and potential
investors may utilise the ROCE ratio as one of numerous profitability ratios.

Year 2022 2021 2020 2019 2018

EBIT 15948 13168 11422 10576 9158

Capital
97165 84838 67137 58282 50488
Employed

ROCE 16.41% 15.52% 17.01% 18.15% 18.14%

38
 Chart Title
120000

100000

80000

60000

40000

20000

0
2016.5 2017 2017.5 2018 2018.5 2019 2019.5 2020 2020.5 2021 2021.5

EBIT Capital Employed ROCE

Interpretation:

The return on capital employed (ROCE) formula informs you how much profit a firm makes
per $1 of invested capital. The higher a company's profit per dollar, the better. As we can see
the ROCE of Kotak Mahindra Bank has been falling across the years which indicates that the
company is not in better condition and its earning capacity has declined.

5. Net Interest Margin:

The difference between interest paid and interest received, adjusted for the entire amount of
interest-generating assets owned by the bank, is the net interest margin.
Net interest income = total interest income- total interest expense
= Net interest income X 100
Total earning assets

Year 2022 2021 2020 2019 2018

Net Interest
16,817.91 15,339.65 13,499.66 11,258.96 9,531.69
Income

Total assets 4,29,428.40 3,83,488.62 3,60,251.69 3,12,172.10 2,64,933.40

NIM 3.92% 4.00% 3.75% 3.61% 3.60%

39
 Chart Title
500000
450000
400000
350000
300000
250000
200000
150000
100000
50000
0
1 2 3 4 5

Year Net Interest Income Series3

Total assets NIM

Interpretation:
As we can see the Net Interest Margin of Kotak Mahindra bank is almost constant over the
few years
This means that the bank's average interest margin from borrowing and lending funds is
stable and adequate.

6. Earnings Per Share (EPS):

The profit of a firm is divided by the number of outstanding shares of its common stock to
compute earnings per share (EPS). The resultant figure is used to determine a company's
profitability. It is typical for a corporation to declare earnings per share (EPS) that has been
adjusted for unusual items and probable share dilution.

EPS = PAT (Profit After Tax)

Number of shares outstanding

Year 2022 2021 2020 2019 2018

PAT 15948 13168 11422 10576 9158

Shares
198.47 198.18 191.3 190.88 190.56
outstanding

EPS 80.3547136 66.4446 59.7073 55.4065 48.0584

40
 EPS
18000
16000
14000
12000
10000
8000
6000
4000
2000
0
1 2 3 4 5

Year PAT
Shares outstanding EPS

Interpretation:
As we can see the EPS of Kotak M bank has been increasing year by year which means the
company that the company is enough profitable to pay out the money to its shareholders. It
can also increase the dividends.

II. OPERATING RATIOS:

The operating ratio compares a company's total operating expenditure (OPEX) to net
revenues to determine managerial efficiency. The operational ratio demonstrates how well a
company's management keeps expenses down while increasing revenue or sales. The lower
the ratio, the more efficient the business is in generating revenue compared to overall costs.

1. Ratio of Interest earned to interest paid:

The interest received on loans and advances is divided by the interest paid on deposits in this
ratio.
= Interest Earned
Interest Paid

Year 2022 2021 2020 2019 2018

Interest 120858.23 114812.65 98972.05 80241.35 69305.96

41
 Earned
Interest Paid 55978.66 58626.40 50728.83 40146.49 36166.74
Ratio 2.16 1.96 1.95 1.99 1.92

Ratio
2.2
2.15
2.1
2.05
2
1.95
1.9
1.85
1.8
2. Interest 1.75 Coverage
2017 2018 2019 2020 2021
Ratio:
The interest coverage ratio is a debt-to-profitability ratio that determines how readily a
corporation can pay interest on its debt. Divide a company's earnings before interest and taxes
(EBIT) by its interest expenditure for a particular period to get the interest coverage ratio.
The times interest earned (TIE) ratio is another name for the interest coverage ratio. This
method is frequently used by lenders, investors, and creditors to assess a company's riskiness
in relation to its present debt or potential borrowing.
Interest coverage ratio= EBIT
Interest Expenses

Year 2022 2021 2020 2019 2018

EBIT 15948 13168 11422 10576 9158
Interest
10,220.91 11,500.62 13,429.95 12,684.25 10,216.81
Expenses
Ratio 1.56033073 1.144982 0.850487 0.83379 0.896366

42
 Chart Title
18000
16000
14000
12000
10000
8000
6000
4000
2000
0
2017.5 2018 2018.5 2019 2019.5 2020 2020.5 2021 2021.5 2022 2022.5

EBIT Interest Expenses Ratio

Interpretation:
As we can see that the interest coverage ratio of Kotak Mahindra bank is increasing it denotes
that company has the ability to pay off its debt. Creditors will not be afraid of loosing the
money and they provide debt when needed.

3. Cash Coverage ratio:

This coverage ratio refers to a company's capacity to meet its yearly interest costs. It assesses
how effectively the company's available cash can be utilised to cover yearly interest costs.
The superior metric is one with a ratio of 1:1 or above.

Cash Coverage Ratio= Total Cash / Interest Expense

Year 2022 2021 20220 2019 2018

Total Cash 16026.33 12493.61 9505.051 10887.53 8908.5

Interest
10,220.91 11,500.62 13,429.95 12,684.25 10,216.81
Expenses

Ratio 1.56799443 1.086342 0.70775 0.85835 0.871945

43
 Ratio
1.8
1.6
1.4
1.2
1
0.8
0.6
0.4
0.2
0
1 2 3 4 5

Ratio

Interpretation:
The cash coverage ratio of Kotak Mahindra bank greater then 1 which indicates that the
company has enough available cash to cover yearly interest costs.

4. Ratio of Total Expenses to Total Income:

This ratio indicates the percentage of total expenses to total income
Ratio of totak expenses to total income = Total expenses/Total income*100

Year 2022 2021 2020 2019 2018

Total
25,510.04 28,246.33 28,570.71 24,644.30 19,722.28
Expenses

Total
33,393.17 32,299.46 32,301.72 28,547.24 23,800.71
Income
Ratio 76% 87% 88% 86% 83%

44
 Ratio

90%
88%
86%
84%
82%
80%
78%
76%
74%
72%
70%
1 2 3 4 5

Ratio

Interpretation:
The expenses to income ratio have been increasing for the past few years and it indicates that
company is spending more then 70% of what it has been earning.

III. SOLVENCY RATIOS:

A solvency ratio is a crucial indicator used by potential business lenders to assess an

organization's capacity to satisfy long-term debt obligations. A solvency ratio is a measure of
a company's financial health that determines if its cash flow is sufficient to cover its long-
term liabilities. An unfavourable ratio might suggest that a corporation is at risk of defaulting
on its financial commitments.

1. Debt to Asset Ratio:

Total debt-to-total assets is a leverage ratio that measures a company's total debt in relation to
its total assets. Analysts can compare a company's leverage to that of other firms in the same
industry using this indicator. This information might reveal a company's financial stability.
The greater the ratio, the greater the degree of leverage (DoL) and, as a result, the greater the
risk of investing in that firm.
Year 2022 2021 2020 2019 2018
Total
4,29,428.40 3,83,488.62 3,60,251.69 3,12,172.10 2,64,933.40
assets
Total
3,37,651.23 3,03,750.70 3,00,813.83 2,58,128.65 2,17,797.42
debt
Debt to
asset 0.78628062 0.7920723 0.8350102 0.8268793 0.8220837
ratio

45
 Debt to asset ratio
0.84
0.83
0.82
0.81
0.8
0.79
0.78
0.77
0.76
1 2 3 4 5

Debt to asset ratio

Interpretation:
As we can see that the debt to asset ratio is less then 1 which indicates that the company have
enough funds to meet the current debt obligation. Creditors use this ratio to see how much
debt the company has and whether the company can repay its existing debt.

2. Equity Ratio:
The equity ratio compares a company's total assets (current and non-current) to its total
equity to determine how leveraged it is: how well it can meet asset requirements without
borrowing.
Companies with equity ratios of.50 or less are considered leveraged; those with ratios of.50
or greater are considered prudent, since they have more equity than debt.
Equity Ratio = Total Equity / Total Assets
Year 2022 2021 2020 2019 2018
Total
4,29,428.40 3,83,488.62 3,60,251.69 3,12,172.10 2,64,933.40
assets
Total
97,165.34 84,838.61 67,136.99 58,281.80 50,488.23
Equity
Debt to
equity 0.22626668 0.2212285 0.1863613 0.1866977 0.1905695
ratio

The Kotak’s Equity ratio is always less than 0.5 which indicates that the company is
leveraged.

46
 FINDINGS

I. Profitability Ratio:
 The Net Profit Ratio of Kotak bank has increased from 15.98 in 2018 to 20.47 in
2022.
 The Return on Equity ratio has increased from 70.87 in 2018 to 60.67 in 2022.
 The Return on Asset ratio has increased from 8.70 in 2018 to 8.11 in 2022.
 The Return on Capital Employed has declined from 18.14in 2018 to 16.41 in 2022.
 The Net Interest Margin has also declined from 3.60 in 2018 to 3.92 in 2022.
 The Earnings per Share has increased from 48.05 in 2018 to 38.37 in 2022.

II. Operating Ratio:

 The Ratio of Interest Earned to Interest Paid has increased from 1.92 in 2018 to 2.16
in 2022.
 The Interest Coverage Ratio has increased from 0.89 in 2018 to 1.56 in 2022.
 The Cash Coverage Ratio has increased from 0.87 in 2018 to 1.56 in 2022.
 The Ratio of Total Expenses to Total income has increased from 83% in 2018 to 76%
in 2022.

III. Solvency Ratio:

 The Debt-to-Equity Ratio has declined from 0.822 in 2018 to 0.786 in 2022.
 The Equity Ratio has increased from 0.190 in 2018 to 0.226 in 2022.

47
 SUGGESTIONS

 The company may enhance its asset class selection as well as other associated criteria
such as time and so on. Their Return on Total Assets and Total Investment to Total
Deposits ratios may improve as a result of this.
 The company may focus on increasing its Net Interest Margin ratio, which is now
low. The aforementioned proposal would help to improve this situation.
 The organization's dividend policy, which has remained mostly inactive, may be
reconsidered. This suggestion has validity in light of rising free reserves and EPS. It
would improve the organization's market position.
 The firm might make improvements to its short-term (liquid) investments to ensure
that both returns and liquidity are met.
 NPAs have grown this year compared to the previous year, thus the bank should
devise a new approach to reduce NPAs while simultaneously exercising extreme
caution while lending money. It should adhere to a strict credit policy.
 The company can try to improve the Return on Capital Employed as it has reduced
over the past few years. The company can try to pay off the debts and thereby
reducing liabilities can also improve the ROCE ratio.
 The company can try to issue bonus shares to their shareholders. Bonus shares signal
to the market that the firm is dedicated to a long-term growth strategy. Bonus shares
increase the number of outstanding shares, which improves the stock's liquidity.

48
 CONCLUSION
Banks are the financial pillars of an economy. It helps in mobilising the deposits and
lending loans to various sectors of the economy. The main purpose of this study is to
concentrate on the FINANCIAL PERFORMANCE OF KOTAK MAHINDRA BANK.
This study used Trend Analysis, SWOT and Ratios. Analysis to analyse the financial
performance of Kotak Mahindra Bank from 2018-202. The growth rate of deposits and
advances are in an upward trend. The data was analysed and a conclusion has been
reached stating that the Kotak Mahindra Bank’s financial performance is strong during
the five-year period.
The bank's overall prospects appear to be promising. The performance of Kotak Mahindra
Bank is excellent. To keep the same position in the market, it is necessary to focus on
liquidity and make investments in high-quality assets in order to generate higher profits.
Kotak Bank should also focus heavily on costs, which are growing year after year,
resulting in a decline in the firm's profitability.
In India, the Kotak Mahindra Bank is the largest private sector bank. From 2018 to 2022,
the researcher looked at the financial performance of the company. The information was
gathered from the bank's annual reports and its website. The information was examined
using various ratios. The conclusion of this research piece is that the Kotak bank's
financial performance was good during the study period.
Kotak Bank is one of the country's leading private banks. It has created a name for itself
because of its unrivalled dependability. People have been satisfied with the bank's prompt
services. The company's current ratio is relatively high, indicating that it can satisfy its
short-term obligations.

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 Based on Kotak Mahindra Bank's 2023 Q4 financial results, it appears that the net profit
has increased by 26% this year, which is a positive sign for both investors and the bank
itself. Despite the crisis faced by Silicon Valley Bank, there hasn't been any significant
impact on the growth of Indian banks, including Kotak Mahindra Bank.

It is worth noting that the banking industry is subject to various internal and external
factors that can impact its growth, including economic conditions, regulatory changes,
and market trends. While the current results suggest positive growth for Kotak Mahindra
Bank, it is important to monitor the bank's performance over time and consider various
factors that may affect its growth and profitability in the future.

50
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