Axis Bank Q4 result: Another strong performance or surprise awaits? Here is what experts think

Private lender Axis Bank will remain in focus as it is set to announce March 2019 quarter (Q4FY19) result. Investors were trading on a cautious note in this bank on Dalal Street. At around 1145 hours, Axis Bank was trading at Rs 752.75 per piece on Sensex, subdued compared to previous trading session. However, the bank has touched an intraday high and low of Rs 758.70 per piece and Rs 749.10 per piece, respectively. So far on the index, the overall uptick has barely been 1% in Axis Bank. This indicates that, investors are more on a wait and watch mode on the private bank. 

For Q4FY19, experts are really upbeat on Axis Bank. However, on quarterly basis, the net profit of the bank is seen to decline, but will remain better compared to losses it booked in Q4FY18. Similarly, net interest income is seen to rise gradually in qoq, but robust in comparison to a year ago same period. 

Talking about Axis Bank's Q4FY19 result, experts at Edelweiss Securities said, "Trajectory on slippages should be controlled largely flowing existing stress pool. Credit cost will remain elevated. Loan growth will be better than industry average given the continued momentum in retail growth and opportunistic pick up in corporate." On similar lines, expert at Phillip Capital highlighted that, Axis Bank's loan growth will bounce back driven by both retail and corporate. Also, NIM to improve on higher loan yield (higher MCLR benefits). Further, Credit cost to remain elevated due to increase in NPAs from watch list and below investment grade portfolio. 

However, in Phillip's view, there will be no major recovery in  comparison to Q3FY19 result. 

Also, IDBI Capital said, "Modest growth in credit, stable sequential NIMs. Slippages as well as credit cost to trend down."

IDBI Capital believes Axis Bank's net profit will come at Rs 1,492.9 crore in Q4FY19, compared to loss of Rs 2,188.7 crore in Q4FY18 but down by 11.2% from Rs 1,680.9 crore in Q3FY19. NII to be at Rs 5,718.9 crore slightly up by 2.1% from Q3FY19 and 20.9% from Q4FY18. 

On the other hand, Phillip Capital predicts PAT to come at Rs 1,615.2 crore in Q4FY19, down by 3.9% qoq. While, NII is seen at Rs 5,723.8 crore up 2.1% qoq and 21% yoy. 

The bank has underwent some major management and structural changes in past few months. In Q3FY19, Axis Bank posted net profit of Rs 1,680.85 crore in Q3FY19, which was higher by a whopping 131.38% compared to Rs 726.44 crore in corresponding period of previous year. Every financial indicator in Axis Bank showed a stable performance. Even net interest income (NII) came in at Rs 5,603.67 crore, up by 18.43% from Rs 4,731.52 crore in Q3FY19. There was a sequential increase of 7.10% when NII in Q3FY19 compared with Q2FY19 NII where the amount stood at Rs 5,232.11 crore. 

Net interest margin for Q3FY19 stood at 3.47%. Also, gross NPA was at Rs 30,854.67 crore which rose by 23.41% versus Rs 25,000.51 crore in Q3FY18.  In percentage terms, Axis Bank's gross NPA was at 5.75% in Q3FY19 vs 5.96% in Q2FY19 vs 5.28% in Q3FY18.