Axis Bank Q3FY22 Preview: NII seen at Rs81.1 billion, PAT at Rs30.5 billion

24 Jan 2022 , 08:12 AM

Result date: 24th January, 2022
Recommendation: Buy
Target price: Rs. 960
(Source: Company, IIFL Research)

Axis Bank is expected to post a strong set of numbers for Q3. Loan growth is estimated at 11% on a YoY basis, driving 10% increase in net interest income. Net interest margin could witness sequential improvement, and come in at 3.4%. Higher LDR and improving share of low-cost deposits will be prominent margin drivers. Operating expense is likely to remain flat on a sequential basis.

Even though provisions are likely to remain elevated, gross NPA ratio is likely to moderate both on a sequential and YoY basis. Absence of one-offs will aid asset quality.

The Bank’s net profit could grow 174% over the year ago quarter.

Important management insights to watch out for:

– The reported bid for Citi’s consumer business
– Slippages, BB and below book
– Outlook on credit growth across segments

Rs. Billion	December 2021 estimates	YoY change	QoQ change
NII	81.1	10%	3%
Total Income	121.0	8%	3%
PPOP	63.8	5%	8%
PBT	40.8	174%	(3%)
PAT	30.5	173%	(3%)

Source: Company, IIFL Research