Axis Bank Q4 results preview: Profit may fall 4-6%; margin may contract sequentially

Axis Bank is expected to report a 4-6 per cent drop in net profit for the March quarter on 8-10 per cent YoY rise in net interest income (NII). Provisions will decline materially on a sequential basis due to high base, analysts said. Margins are seen contracting, sequentially.

ICICI Securities sees Axis Bank to report 5.9 per cent YoY fall in profit at Rs 6,233 crore. It sees NII rising 8.5 per cent at Rs 12,741 crore. Pre-provision operating profit is seen at Rs 9,042 crore. down 1.4 per cent YoY. NIM is seen coming at 4.22 per cent against 4.01 per cent in the December quarter and 3.89 per cent in the year-ago quarter.

Motilal Oswal expects Axis Bank to report 4.1 per cent YoY drop in net profit at Rs 6,352.50 crore. It sees NII rising 8.3 per cent YoY to Rs 12,719 crore. The brokerage expects cost ratios to remain elevated and said margin may moderate YoY. Gross NPA is seen at 1.6 per cent while net NPA at 0.4 per cent. Expect business growth to remain healthy, the brokerage said.

YES Securities said the sequential loan growth is likely to be in the 4 per cent-ballpark due to idiosyncratic growth trajectory. NII growth will be slightly slower than average loan growth due to rise in cost of deposits outpacing yield on advances and decline in credit deposit ratio, it said.

"Consequently, NIM will be slightly lower sequentially. Sequential fee income growth will broadly match loan growth. Opex growth will broadly match loan growth. Slippages would be broadly stable on sequential basis. Provisions will decline materially on sequential basis due to high base in 3Q on account of AIF provisions," it said.

This brokerage sees profit at Rs 6,634.70 crore and NII at Rs 13,015 crore.