ABOUT THE COMPANIES

Kotak Mahindra Bank Limited the flagship company of the Kotak Group is one amongst the fastest growing banks and most admired financial institutions in India. It offers services such as transaction banking, operates lending verticals, manages IPOs also provides working capital loans. The principal business activities of the Bank include consumer banking, commercial banking, corporate banking, treasury, and other financial services. Currently company has 5.0 Cr. customers who are served through a network of 1,948 branches across the country. 

Axis Bank incorporated in December 1993, is a private sector bank. It has the third-largest network of branches among private sector banks and an international presence through branches in DIFC (Dubai) and Singapore along with representative offices in Abu Dhabi, Sharjah, Dhaka and Dubai and an offshore banking unit in GIFT City.Company has well distributed branch network of 5706 branches along with 130 new branched added in recent quarter and have 16,026 ATMs and Cash recyclers machines.

Business to Business Comparison:

Kotak Mahindra Bank along with its subsidiaries offers a comprehensive range of financial products and services to its customers which includes Corporate Loans, Trade Finance, Business Banking, Commercial Real Estate, Forex/ Treasury, Cash Management Custody Business and Off-shore Lending under Wholesale Banking. It offers Agriculture Finance, Tractor Finance, Commercial Vehicles finance, Construction Equipment finance, Microfinance and Gold Loans under Commercial Banking. Under Consumer banking segment company offers Branch Banking, Kotak811, Home loans & LAP, Personal Loans, Consumer Finance, Credit Cards, Priority Banking, Small Business Loans, Working Capital, NRI Banking, Rural Housing & Business Loans, Forex Cards, FASTag and Loan against Shares. Company also offers other financial services such as Private Banking, Car and 2W Loans, Mutual Funds, Alternate Assets, Off-shore Funds, Life Insurance, General Insurance, Investment Banking / DCM, Broking, Infra Debt Finance and Asset Reconstruction to its customers. Company’s depository subsidiary, Kotak Securities has 11.4% market share as per Q4FY24 and it offers services which allows the customers to hold equity shares, government securities, bonds, and other securities in electronic or Demat forms.On international front the Bank addresses the entire spectrum of financial needs of Non-Resident Indians (NRIs) through their tie-up with the Overseas Indian Facilitation Centre (OIFC) as a strategic partner which gives them a platform to share their comprehensive range of banking & investment products and services for Non-Resident Indians (NRIs) and Persons of Indian Origin (PIOs).  The bank also has overseas subsidiaries with offices in Mauritius, London, Dubai, Singapore, San Francisco & New York which are mainly engaged in investment advisory and investment management of funds, equity & debt trading, management of GDR/ FCCB issuances, broker & broker dealer activities and investments.Company’s Kotak Mahindra AMC & Trustee Co. has overall 3,84,007 Cr. worth of Average Assets Under Management and 2,38,018 Cr. worth of Average Assets Under Management as Equity. It has GROUP AUM of Rs. 5,60,140 Cr. along with CUSTOMER ASSETS of Rs. 4,23,324 Cr. and Deposits of Rs. 4,48,954 Cr.

Axis Bank’s subsidiaries provides various services such as Axis Capital Ltd provides focused and customized solutions in Investment Banking and Institutional Equities. 90 IB deals closed in FY24 that include 52 ECM and 7 M&A deals and it ranks 2nd in ECM deals.A.Treds Ltd (67% shareholding) is engaged in the business of facilitating financing of trade receivables. It is one of the three entities allowed by RBI to set up the Trade Receivables Discounting System (TReDS), an electronic platform for facilitating cash flows for MSMEs. Its digital invoice discounting platform ‘Invoicemart’ has set a new benchmark by facilitating financing of MSME invoices of ~Rs. 1,04,000 Crs.Axis Asset Management Co. Ltd (75% shareholding) - PMS,AIF& Mutual Funds. 5% AUM market share. AUM:~Rs.2,74,265 Cr.Axis Trustee Services Ltd is registered with the SEBI and has been successfully executing various trusteeship activities including debenture trustee, security trustee, security agent, lenders’ agent, trustee for securitisation and escrow agent, among others. Assets under Trust: Rs. 39,04,153 Cr. with 24% (AUM) market share in Debenture Trustee segment and holds 2nd Rank across industry. Axis Securities Ltd is 3rd largest bank led retail brokerage in terms of customer base with customer base of 5.45 Mn.Freecharge - It is in the business of providing merchant acquiring services, payment aggregation services, payment support services, and business correspondent to a Bank / Financial Institution, distribution of Mutual Funds. Axis Mutual Fund Trustee Ltd (75% shareholding) acts as the trustee for the mutual fund business.Axis Bank UK Ltd is the banking subsidiary of the Bank in the UK and undertakes the activities of banking.

KPI Comparisons as of Q3Fy25:

Latest Results:

Kotak Mahindra’s PAT for Q3Fy25 increased to ₹4,701cr from ₹4265 crore in Q3FY24 up 10% YoY. Its PAT for Q3FY25reached 3305crore with small setback from Rs. 3344crore in Q2Fy25 while Company’s Axis bank’s PAT reached 19256 in 9mFy25 period marking 9% growth on YoY basis along with 14% and 5% growth on YoY and QoQ basis in Core operating profit in the same period.

Kotak Mahindra Bank’s Net Interest Income (NII) grew by 10% YoY and 2.5% on QoQ basis and its fee income grew by 10% on YoY basis. Axis Bank’s Net Interest Income grew 9% YOY and 1% QOQ and its Fee income grew 6% YOY.

Industry Outlook:

The Indian banking industry is expected to grow at a CAGR of 10-12%, with increasing profitability, better asset quality, and digital advancements. However, challenges like global economic uncertainties, cyber risks, and evolving regulations will require banks to remain agile. Overall, the sector is set for robust expansion, with private banks leading in innovation and PSU banks strengthening their market share.

CONCLUSION:

From above comparison it can be seen that bothKotak Mahindra Bank and Axis Bank are leading private-sector banks in India, each with its own strengths and areas of focus. Kotak Mahindra Bank is known for its strong capital adequacy, customer-centric approach, and robust wealth management services, whereas Axis Bank has a wider customer base, a more extensive branch network, and a diversified loan portfolio. While Kotak maintains a more conservative growth strategy with a focus on high asset quality, Axis Bank is more aggressive in expansion and digital transformation. Ultimately, the choice between the two depends on an investor’s or customer’s preference for stability and premium services (Kotak) versus scalability and diversified financial solutions (Axis).

Which one you will prefer for investing point of view? And of course, for your banking related services? let us know on info@smartinvestment.in and you can also request for comparisons between any companies or sectors, in return we will try to cover it in our next report!

Comparative Analysis by: HET ZAVERI

info@smartinvestment.in

(Disclosures: Above mentioned is not an investment advice, it’s just a comparison of two likewise companies of same sector which may help in taking advised decisions for investors. At the time of writing this article, author, his clients & dependent family members may have positions in the stocks mentioned above. The author, his firm, his clients, or any of his dependent family members may make purchases or sale of the securities mentioned in website. Author may have positions in above stocks so have vested interest obviously in their going up or down as the case may be.

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