Private sector lender Axis Bank is expected to report an 8-9 per cent year-on-year increase in net profit for the quarter ending September 2024. This rise in profit is attributed to growth in net interest income (NII), non-interest income, and reduced slippages.
According to the average estimate from five brokerages, NII for the second quarter is projected to grow by 10 percent year-on-year. While slippages are anticipated to increase by 29 per cent year-on-year, they are expected to decline by 12 per cent compared to the previous quarter.
Loan growth for the quarter is expected to be modest, with a 2 per cent increase quarter-on-quarter, but a stronger 11 per cent rise year-on-year.
In the previous June quarter, Axis Bank posted a net profit of ₹6,035 crore, reflecting a 4 per cent year-on-year increase, while net interest income grew by 12 per cent to ₹13,448 crore.
Brokerage firm Kotak Institutional Equities NIM to be stable around 3.8 per cent. “We are building loan growth of 11 per cent YoY (2 per cent QoQ). We expect NIM to be stable (3.8 per cent) QoQ as we are past the re-pricing of funds. Fee income growth should be sluggish, reflecting weak loan growth,” the firm said.
It further added, “We expect slippages of ₹5000 crore (2 per cent of loans), mostly led by retail. Key discussion areas: slippages, especially from the unsecured segment, deposit mobilization and NIM progression.”
In the same quarter of the previous year (Q2 FY24), Axis Bank reported a net profit of ₹5,863.6 crore, while in the previous quarter of the current financial year (Q1 FY25), the profit stood at ₹6,034.6 crore.
Motilal Oswal Financial, a domestic brokerage, projects Axis Bank's profit after tax for Q2 at ₹6,630 crore, reflecting a 13 per cent year-on-year increase. On the operational front, MOFSL anticipates net interest income (NII) to grow by approximately 11 per cent year-on-year to ₹13,630 crore.
With 'Other income' estimated at ₹6,070 crore, Axis Bank's 'Total income' at the end of Q2 FY25 could reach ₹19,700 crore, according to MOFSL.
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