Private lender Axis Bank is expected to achieve double-digit growth in profit and net interest income (NII) for the April-June quarter (Q1FY25), driven by healthy loan growth. The company will release its Q1 results on July 24, 2024.
According to the average estimate of eight brokerages, Mumbai-headquartered Axis Bank is projected to register a 13 percent year-on-year (YoY) profit growth at Rs 6,576 crore in Q1FY25 as against Rs 5,797 crore in Q1FY24. NII is also expected to rise by 12 percent YoY to Rs 13,361 crore in Q1FY25, compared to Rs 11,958 crore in the same period last year.
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What factors are driving the earnings?
Strong loan, deposit growth: Axis Bank’s loans, or advances, are expected to increase by 13.5 percent YoY to Rs 9.74 lakh crore in Q1FY25, while deposits are predicted to grow by 12.3 percent YoY to Rs 10.5 lakh crore, according to analysts at YES Securities.
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Improving asset quality: The lender’s gross non-performing assets (NPA) are likely to decrease to 1.5 percent in the quarter ended June, down from 1.7 percent in the same period last year. Net NPA is also expected to improve to 0.3 percent in Q1FY25, from 0.4 percent a year ago, according to Motilal Oswal analysts.
Margin contraction: Analysts at Phillip Capital anticipate a 6 basis points (bps) YoY contraction in Axis Bank’s margins to 4.04 percent in Q1FY25, down from 4.1 percent in Q1FY24 due to rising funding costs.
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What to look out for in the quarterly show?
Market participants will keenly watch out for Axis Bank’s margin outlook, slippages in unsecured segment, deposit mobilisation, and asset quality trends for the rest of the fiscal year.
So far this year, the stock of this private lender surged over 14 percent, outpacing benchmark Nifty 50’s 12 percent rise.
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