Q3FY23 Preview: Axis Bank: NII seen at Rs105.4 billion, PAT at Rs53.7 billion

23 Jan 2023 , 07:19 AM

Result date: 23^rd January, 2023

Recommendation: Buy

Target price: Rs1,090

Axis Bank is likely to post healthy loan growth of 5% on a sequential basis, driven by focus segments. As compared to the year-ago quarter, loan book could grow 15-16%. Deposit growth is pegged at 10% over the year-ago quarter and 5% sequentially. Overall, Net Interest Income (NII) could grow 22% over the year-ago quarter and 2% sequentially.

Margins are likely to remain relatively stable sequentially at ~3.96%. Slippage ratio is estimated at <2.5% on an annualized basis.

Analysts at IIFL Capital Services expect the bank to post operating profit growth of 32% over the year-ago quarter.

Profit After Tax (PAT) growth would be sharper, owing to benign credit cost (~0.5% annualized).

Important management insights to watch out for:

• Credit demand across segments
• Asset quality outlook
• Improvement in cost ratios

 

Rs Billion	December 2022 estimates	YoY change	QoQ change
Net Interest Income (NII)	105.4	22%	2%
Total Income	149.6	20%	5%
PPOP	81.0	32%	5%
Provisions	8.9	(33)%	62%
Profit After Tax	53.7	48%	1%

Source: IIFL Research