Axis Bank Q3 Results Preview: Private lender may report strong numbers on all fronts; loan growth likely to be lower than peers

Axis Bank Q3 Results Preview: Private lender Axis Bank is expected to report strong earnings for the October-December quarter of this fiscal as same as of other banking giants like HDFC Bank, and ICICI Bank among others.

Axis Bank’s profit is likely to swell by 51.6 per cent in the third quarter of the financial year 2022-23 (Q3FY23) to Rs 5,480 crore against Rs 3,614.2 crore in the same quarter a year ago, as per Zee Business preview of the bank.

Its net interest income – or the difference between interest earned and interest paid – may surge by 26 per cent to Rs 10,900 crore in the December quarter of FY23 as compared to Rs 8,652.5 crore in a year ago quarter.

Also Read: ICICI Bank Q3FY23 Results: Private lender’s profit, NII each grow 34%; asset quality improves - beat estimates

The net interest margin (NIM) – a key measure of profitability for lenders – of Axis Bank is likely to jump by 20 to 30 basis points in the December quarter, according to Zee Business preview.

Zee Business expects the asset quality of the bank is estimated to improve. It sees gross non-performing asset (NPA) – or bad loans – may improve to 2.4 per cent from 2.5 per cent quarter-on-quarter (QoQ) and Net NPA may ease by 10 bps to 0.5 per cent versus 0.51 per cent QoQ.

The loan growth of Axis Bank is seen rising to 15 per cent from 14 per cent, however, it is likely to be lower than other banks due to a higher base, Zee Business preview said. However, it forecast better loan growth in the retail and small and medium enterprise segments.

Also Read: Kotak Mahindra Bank Q3FY23 Results: Profit, NII grow over 30% YoY; beat estimates – asset quality improves

Analysts at ICICI Securities expect slippages of Axis Bank to be around 2.3 per cent and the pace of recoveries/upgradation to moderate. To that extent, credit cost run-rate is likely to trend towards normalisation, the brokerage said building in around 50-60 bps of credit cost.

Earlier on Saturday, ICICI Bank and Kotak Bank’s profits surged by more than 34 and 31 per cent respectively, in the December quarter. While HDFC Bank’s profit jumped more than 18 per cent for the October-December quarter – India’s largest private lender released its results last Saturday.

Shares of Axis Bank on Friday closed flat with a positive bias at Rs 929.5 per share on the NSE. ICICI Securities maintained a Buy recommendation on the stock with a short target of Rs 942 apiece.