Axis Bank Q3FY25 Preview: PAT likely to grow over 5%; NPAs may edge higher marginally
Axis Bank Q3FY25 Preview: PAT likely to grow over 5%; NPAs may edge higher marginally
The country's fifth leading bank by market capitalisation- Axis Bank is slated to report its October-December quarter earnings on January 16 (Thursday). Zee Business research estimates profit after tax (PAT) at the private sector lender to increase 5.3 per cent year-on-year (YoY) to Rs 6,399 crore during the reporting quarter as against Rs 6,071 crore in the corresponding period last year. According to analysts, the lender's profitability will likely see an impact due to the increased provisions year-on-year.
Net interest income (NII),the difference between the interest a bank earns and the interest it pays, is expected to rise 10 per cent from Rs 12,532 crore reported in Q3FY24 to Rs 13,756 crore in the period under review.
The bank's net interest margin (NIM)- a financial metric used to compute profitability- is estimated to be in the range of 3.8-4 per cent.
Furthermore, the lender's operational performance will be weighed down by tepid growth in the loan segment of 11 per cent during the quarter under review.
Asset quality esimates
Analysts expect the lender's asset quality to weaken marginally on a sequential basis. For the reporting quarter, gross non-performing assets (GNPA) ratio at Axis Bank is seen edging higher to 1.5 per cent versus 1.4 per cent in the previous September. Similarly, the net non-performing assets ratio is seen likely at 0.4 per cent in comparison to 0.3 per cent in the previous quarter.
The marginal rise in NPAs is estimated on the back of problems in the lender's microfinance book.
Key monitorable
The stakeholders will closely keep an eye on the commentary related to the MFI segment.
Axis Bank share price performance
Ahead of its results tomorrow, shares of Axis Bank traded with a cut of over 2 per cent at Rs 1,026.3 per share. The bank's shares are trading near the 52-week low price of Rs 995.7 per share. In the last one year, shares of the lender have tumbled over 8 per cent, while Nifty50 during the same time has gained over 6 per cent.
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