Axis Bank Q2 results: Profit may rise 10-11% YoY, NII 15-17%. Here's what to watch

Axis Bank Ltd is likely to report a 10-11 per cent year-on-year (YoY) rise in net profit for the September quarter on a 15-17 per cent jump in net interest income (NII), Analysts expect margin pressure to persist. Asset quality and credit cost may remain under control, they said adding that Citi integration, near-term growth trends and the progress on net interest margin (NIM) improvement would be key discussion areas.

Ahead of its Q2 results, shares of Axis Bank were trading 0.19 per cent higher at Rs 965.30 on BSE. The stock is up 2.53 per cent year-to-date against flattish Nifty Bank during the same period. Kotak Institutional Equities is building in a loan growth of 20 per cent YoY. It expects net interest margin to decline by 5 basis points sequentially due to higher cost of deposits.

"We expect loan mix to be a bit more favourable towards higher yielding loans as seen in recent quarters. We expect slippages of Rs 4,200 crore (2 per cent of loans) mostly led by retail segment. Trends on slippages and overall asset quality should not be too worrisome and broadly stable. We expect the bank to make higher provisions for expenses pertaining to the merger.

This brokerage sees 9.7 per cent YoY at Rs 5,846 crore on 15.8 per cent YoY rise in NII at Rs 12,002 crore. NIM is seen at 3.9 per cet.

Motilal Oswal anticipates profit at Rs 5,931.40 crore, up 11.3 per cent YoY. It sees NII rising 15.7 per cent at Rs 11,984.70 crore. Provisions are seen at Rs 810 crore against roughly Rs 1,030 crore in June and Rs 550 crore in the year-ago quarter. Gross non-performing assets as percentage of total deposits is seen at 2 per cent against 2.5 per cent YoY.

PhillipCapital said it sees loan book including erstwhile Citi consumer portfolio to grow 3 per cent sequentially. It expects employee cost for Q2 to have wage impact of erstwhile Citi employees post acquisition.  The bank may bear opex of Rs 2,000 crore over 18 months, it said adding that NIM may see marginal contraction.

This brokerage see profit at Rs 5,871 crore, up 10.2 per cent YoY. NII is seen rising 16.9 per cent YoY to 12,108.50 crore.

 

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