 "Axis Bank Q4 preview: PAT may stay tepid, NIM could contract, say analysts")
Axis Bank Q4 results preview: Private lender Axis Bank may report tepid numbers for the March quarter (Q4) of financial year 2023-24 (FY24) on the back of high base (sequentially), and lower treasury income.
The bank, however, could be back in the black on a yearly basis.
Axis Bank, which is slated to report its Q4FY24 results on Wednesday, April 24, 2024, had incurred a net loss of Rs 5,728 crore in the year-ago quarter (Q4FY23) due to its merger with Citi. In the December quarter (Q3FY24), however, PAT was Rs 6,071 crore.
Its net interest income (NII) was Rs 11,740 crore in Q4FY23, and Rs 12,530 crore in Q3FY24.
Here's what analysts expect from Axis Bank's Q4 numbers:
Nomura
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The global brokerage expects Axis Bank's net profit to come at Rs 6,280 crore in Q4FY24, up 3 per cent quarter-on-quarter (Q-o-Q).
Operationally, too, it anticipates a muted performance sequentially with NII seen rising 1 per cent Q-o-Q to Rs 12,650 crore, and pre-provision profit rising 2 per cent Q-o-Q to Rs 9,290 crore. On a yearly basis, these metrics would grow 8 per cent and 1 per cent, respectively.
Nomura forecasts a 15 per cent Y-o-Y / 4 per cent Q-o-Q growth in loan book at Rs 9.74 trillion, while deposits may rise 11 per cent Y-o-Y / 5 per cent Q-o-Q to Rs 10.55 trillion.
It expects net interest margin (NIM) to contract 30 basis points Y-o-Y and 9 bps Q-o-Q to 3.9 per cent.
BNP Paribas
BNP Paribas expects Axis Bank's core net profit (excluding one-time loss from Citi) to drop 14 per cent Y-o-Y and 4 per cent Q-o-Q to Rs 5,829.5 crore in Q4FY24. The same was Rs 6,761.4 crore in the corresponding quarter of the previous year, and Rs 6,071.1 crore in Q3FY24.
NII, it said, may stay flat sequentially, but rise about 7 per cent Y-o-Y to Rs 12,537.9 crore in the quarter under study.
Elara Securities
The domestic brokerage expects Axis Bank's Q4FY24 net profit to fall on a quarterly basis to Rs 5,944.4 crore.
PPoP, too, may dip slightly to Rs 9,109.2 crore from Rs 9,141.2 crore reported in Q3FY24.
Prabhudas Lilladher
PL sees Axis Bank's core profit rising 4 per cent Q-o-Q to Rs 6,322.7 crore; NII rising 3.4 per cent Q-o-Q to Rs 12,955.3 crore; and PPoP up 2 per cent Q-o-Q to Rs 9,330.2 crore.
Similar to Nomura, it sees loan book up 15 per cent Y-o-Y / 4.3 per cent Q-o-Q to Rs 9.72 trillion. NIM, it said, may dip 7 bps Y-o-Y / 11 bps Q-o-Q to 3.95 per cent.
Gross non-performing (GNPA) ratio, meanwhile, may improve 6bps to 1.52 per cent from 1.58 per cent Q-o-Q.
Kotak Institutional Equities
The brokerage has built is loan growth of 14 per cent Y-o-Y / 3.5 per cent Q-o-Q, with the loan mix a bit more favorable toward higher-yielding loans as seen in the recent quarters.
It expects NIM to decline by 10 bps Q-o-Q to 3.9 per cent, led by higher cost of deposits.
"We expect slippages of Rs 4300 crore (2 per cent of loans), mostly led by the retail segment. Trends on slippages and overall asset quality likely to be stable and less worrisome. We expect the bank to make provisions for expenses pertaining to the merger. Citi integration, near-term growth trends and progress of NIM would be the key discussion areas for the quarter," it noted in its results preview report.
It pegs PAT at Rs 6,115.5 crore; PPoP at Rs 9,262.9 crore; NII at Rs 12,791.9 crore; and Treasury income at just Rs 91 crore (down 69 per cent Q-o-Q). Provisions may rise 103 per cent Y-o-Y / 6 per cent Q-o-Q to Rs 1,091.3 crore.