Result date: 28th April, 2022
Recommendation: Buy
Target price: Rs940
Axis Bank is likely to report a healthy performance for the March 2022 quarter. The bank’s loan growth pegged at ~16% on a year-on-year
basis. Rising share of corporate loans and superior growth in unsecured loans could outline the quarterly performance. Consequently, net interest income (NII) could grow 21% over the year-ago quarter.
Despite marginal increase in operational expenses on a sequential basis, margins could remain unchanged at 3.5%.
Slippages are likely to moderate aiding the bank’s gross NPA ratio. Amid stable provisions, credit costs are expected to remain under check.
Profit After Tax (PAT) could grow 38% over the year-ago quarter, and will be aided by decline in provisions.
Important management insights to watch out for:
· Credit demand across segments
· Trends in restructuring, asset quality of BB & below rated loan accounts
· Outlook on net interest margin
Rs Billion | March 2022 estimates | QoQ change | YoY change |
Net Interest Income (NII) | 91.1 | 5% | 21% |
Total Income | 131.1 | 5% | 18% |
Pre-Provisioning Operating Profit | 62.6 | 2% | 9% |
Profit After Tax (PAT) | 36.9 | 2% | 38% |
Source: IIFL Research
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