[ad_1]
Axis Bank Q2 Results Preview 2024, Date: Axis Bank is expected to release its July-September quarter (Q2) results for the financial year 2024-25 (FY25) on Thursday, October 17. Brokerages on average expect Axis Bank to report double-digit net profit growth, at the low end of the range. on an annual (year-over-year) basis, due to tepid growth in loans and other income.
In the corresponding quarter of the previous year (Q2 FY24), Axis Bank had reported a net profit of Rs 5,863.6 crore. The same amount was Rs 6,034.6 crore in the previous quarter of the current financial year (Q1 FY25).
Operationally, Axis Bank recorded a net interest income (NII) of Rs 12,314.6 crore in Q2 FY24 and Rs 13,448.2 crore in Q1 FY25. Its profit before provision was Rs 8,631.9 crore and Rs 10,106.2 crore respectively.
Here’s what to expect from Axis Bank’s Q2 2024 results on October 17:
Nomura
The Japan-based brokerage shared conservative estimates. He expects Axis Bank’s second quarter net profit to be around Rs 6,330 crore, up 8% year-on-year and 5% quarter-on-quarter.
According to Nomura, this could be due to higher provisions compared to the previous year. It projects provisions for Q2FY25 at Rs 1,890 crore, up 132% year-on-year from Rs 810 crore set aside last year. Sequentially, this would be a decline of 7% from around Rs 2,040 crore seen in Q1FY25.
On the corporate side, Nomura expects Axis Bank’s loans in Q2FY25 to be around Rs 9.95 trillion, a growth of 11% year-on-year and at barely 2% quarter-on-quarter.
Similarly, deposits stood at Rs 10.89 trillion, up 14 percent year-on-year and 2 percent quarter-on-quarter.
Motilal Oswal Financial Services
Domestic brokerage firm Motilal Oswal Financial estimates Axis Bank’s second-quarter profit after tax at Rs 6,630 crore, up 13% year-on-year.
Operationally, MOFSL expects NII to increase by around 11% from the previous year to Rs 13,630 crore. Including ‘Other Income’ of Rs 6,070 crore, Axis Bank’s ‘Total Income’ at the end of Q2 FY25 could stand at Rs 19,700 crore, MOFSL said.
“We expect Axis Bank’s credit-to-deposit (CD) ratio, as well as cost ratios, to remain elevated in Q2FY25. We also expect margin moderation in Q2” , he said.
Motilal Oswal pegs Axis Bank’s loan portfolio at Rs 10.1 trillion, a growth of 12.1 per cent year-on-year. Meanwhile, deposits stood at Rs 11 trillion, up 15.8% year-on-year.
The brokerage, which expects Axis Bank’s gross non-performing assets (GNPA) ratio to rise from 1.5 percent quarter-on-quarter to 1.6 percent, said the lender’s asset quality will feature among the key elements to monitor.
He expects the NNPA to see a slight increase to 0.4 percent from 0.3 percent quarter-on-quarter.
Prabhudas Lilladher Institutional actions
Projecting moderate growth on a quarterly basis, the brokerage said Axis Bank may report NII at Rs 13,608.5 crore in Q2FY25, up 10.5% YoY and 1.2% over one quarter.
It forecasts profit before provision stable at Rs 10,106.3 crore on a sequential basis. This would, however, represent annual growth of 17.1 percent.
An increase in provisions of nearly 88 per cent year-on-year, to Rs 1,529.5 crore for the quarter, could limit the rise in net profit to 9.7 per cent year-on-year, PL said. It sees PAT at Rs 6,432.6 crore for the second quarter of FY25.
It expects the net interest margin (NIM) to contract by 19 basis points year-on-year and 9 basis points quarter-on-quarter, to 4 percent.
“Loan growth could rebound over a quarter; NIM is expected to decrease by 9 basis points quarter-on-quarter to 4.00 percent due to increase in cost of funds (CoF). PPoP, too, is expected to remain stable quarter-on-quarter due to increase in offsetting operating expenses with increase in other income,” the brokerage said.
Kotak Institutional Shares
Kotak Institutional Equities is pricing in loan growth of around 11 percent year-on-year (2 percent quarter-on-quarter). This brings NIM’s projection to 3.8 percent (down 19 basis points YoY/6 basis points QoQ), as it estimates the revaluation of funds will lag behind the lender.
Growth in fee income, he said, is expected to be slow, reflecting weak loan growth.
Further, Kotak Institutional Equities said Axis Bank’s slippages could reach Rs 5,000 crore (around 2 per cent of loans), mainly due to retail. The key things to watch out for would be slippages, especially in the unsecured segment, deposit mobilization and NIM progression.
Overall, it pegs Axis Bank Q2 NII at Rs 13,383.7 crore, Axis Bank Q2 profit before provisioning at Rs 9,761.7 crore; Axis Bank Q2 PAT at Rs 6,114 crore.
Nuvama Institutional Actions
Axis Bank’s NII for the second quarter of 2024, Nuvama Institutional Equities said, is expected to grow 1.8% quarter-on-quarter and 11.2% year-on-year. Including other income, the total income may stand at Rs 19,688.9 crore (up 13% YoY and 2% QoQ). The margin could decrease by 3 basis points.
YES Titles
YES Securities said Axis Bank’s sequential loan growth will be around 3.5 per cent due to idiosyncratic growth trajectory. NII growth, it adds, may be slightly slower than average loan growth due to the rising cost of deposits outpacing the yield on advances.
It pegs NII at Rs 13,751.2 crore, up 11.7% YoY and 2.3% QoQ.
Therefore, NIM may fall sequentially. Additionally, operating expense growth could be lower than business growth, while slippage could be lower on a sequential basis due to seasonality.
Provisions will also decline on a sequential basis, said YES Securities for Axis Bank.
It forecast Axis Bank’s second quarter net profit of Rs 6,710.4 crore, up 14.4% year-on-year and 11.2% quarter-on-quarter.