Axis Bank Q1 results preview: Net profit likely to jump 42% to Rs 5,840 crore, asset quality may remain steady

Axis Bank — India's fifth largest lender by market capitalisation (mcap) — is scheduled to report its financial results for the April-June period on Wednesday, July 26. Analysts expect the private sector bank to stage a strong quarterly performance driven by robust demand, and steady credit costs as well as asset quality.
 
This will be Axis Bank's first full quarterly report since its integration with Citigroup's consumer and non-banking finance businesses in India. In March, Axis Bank completed a deal with Citigroup that marked the US lender's exit from its credit card and retail businesses in India.

What to expect in Axis Bank Q1 results

According to Zee Business research, Axis Bank is estimated to report a standalone net profit of Rs 5,840 crore for the quarter ended June 2023, which translates to an increase of 41.6 per cent compared with the corresponding period a year ago. 

The analysts expect Axis Bank's net interest income (NII) — or the difference between interest earned and interest paid — to grow 27.9 per cent on a year-on-year basis to Rs 12,000 crore. 

According to the research, the results for the June quarter will not be fully comparable with the year-ago period owing to the Citigroup deal. 

Zee Business analysts peg Axis Bank's loan growth to be in the range of 22-25 per cent and deposit growth in the range of 20-22 per cent for the three-month period. They estimate the lender's net interest margin (NIM) — a key measure of profitability — to decline by 10-20 basis points sequentially. 

Asset quality 

According to the research, Axis Bank's gross non-performing assets (NPAs) — or bad loans — as a percentage of total loans are estimated to be in the range of 1.9-2.1 per cent for the June quarter as against 2.02 per cent for the March quarter. The analysts peg the lender's net NPAs to remain unchanged on a quarter-on-quarter basis, at 0.39 per cent. 

How Axis Bank fared in Q4 

For the quarter ended March 31, 2023, Axis Bank reported a net loss of Rs 5,728.4 crore owing to an exceptional loss of Rs 12,489.8 crore. Excluding the exceptional loss, the lender registered a net profit of Rs 6,625 crore for the three-month period.

Its NII increased 33.1 per cent on a year-on-year basis to Rs 11,742.2 crore, according to a regulatory filing. 

The lender's NIM contracted marginally on a sequential basis, to 4.22 per cent for the March quarter as against 4.26 per cent for the previous three months. 

Axis Bank shares: Past performance 

Axis Bank shares finished the June quarter with a gain of 15 per cent, outperforming a rise of more than 10 per cent each in the Nifty and the Nifty Bank. 

As of July 24, Axis Bank shares grew 33.4 per cent in the past year, as against a gain of 17.7 per cent in the Nifty and 25 per cent in the Nifty Bank. 

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