Private sector lender Axis Bank may report robust earnings in the first quarter of the financial year (Q1FY23) on Monday, July 25, 2022. The bank may come out with double-digit year-on-year growth in both top and bottom lines, similarly, the asset quality of the bank is also likely to improve in Q1.

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The highest estimate, ShareKhan sees Axis Bank’s profit after tax may surge nearly 85 per cent to Rs 3,987 crore, followed by Equirus Securities expects a profit of private bank likely to grow by 81.5 per cent to Rs 3,921.6 crore during the June-end quarter of FY23.

While YES Securities sees Axis Bank’s profit may grow over 68 per cent to Rs 3,635.6 crore and Motilal Oswal expects almost 60 per cent growth in profit to Rs 3,450 crore in Q1FY23.

Brokerages see Axis Bank’s net interest income (NII) may grow between 17-21 per cent during the June quarter of FY23.

Sequential loan growth would be reasonable due to the bank would be bouncing back from the impact of the third wave of Covid-19 in Q4FY22, which would somewhat offset the seasonal impact of a tepid first quarter of the financial year, YES Securities said in its expectations.

On a quarter-on-quarter (QoQ) basis, NII growth would be healthy due to positive loan mix changes and the yield on advances evolving higher at a faster pace than the cost of deposits due to repricing of externally benchmarked loans, implying NIM expansion on a sequential basis, the brokerage added.

Similarly, sequential fee income growth would be healthy due to a bounce back in payments-related fees somewhat offsetting seasonal sluggishness and provisions would rise materially on a sequential basis due to lower recoveries, YES Securities also said.

Equirius Securities expects sequential growth in advances of around 4 per cent, also expects NIMs (net interest margin) to be stable QoQ. The brokerage also expects limited net slippages and consequently contained provisions.

Similarly, Motilal Oswal expects credit costs to remain steady and slippages will be key monitorable. The brokerage expects the margin to witness a slight expansion to around 3.5 per cent and cost to assets is another key monitorable.

Expecting business growth to see healthy traction, Motilal Oswal said that restructuring and BB & below pool to remain a key focus area.