Q2FY23 Preview: Axis Bank: NII seen at Rs95.8 billion, PAT at Rs45.8 billion

19 Oct 2022 , 04:15 AM

Result date: 20^th October, 2022
Recommendation: Buy
Target price: Rs930

Axis Bank is likely to post good growth in loans at 18% over the year-ago quarter. Sequential loan growth is estimated at 5%. Consequently, the Net Interest Income or NII could grow 21% over the year-ago quarter. Softness in non-interest income could lead to 16% growth in total income on a year-on-year basis.

The Bank’s margins are likely to improve sequentially from 3.6% in Q1FY23, despite the fact that the Cost-to-income ratio could remain on the higher side in the quarter.

Benign credit costs (on a year-on-year basis) could drive a 46% increase in Profit After Tax (PAT).

Important management insights to watch out for:

• Credit demand across key segments
• Asset quality trends
• Margin drivers

Rs. Billion	September 2022 estimates	QoQ change	YoY change
Net Interest Income	95.8	2%	21%
Total Income	136.1	10%	16%
Pre-Provisioning Operating Profit	69.0	17%	16%
Provisions	7.5	109%	(57)%
Profit After Tax	45.8	11%	46%
Loans	7,362	5%	18%
Deposits	8,357	4%	14%

Source: Company, IIFL Research