Earnings Outlook
Axis Bank net profit seen up 6.1% YoY on muted loan growth
This story was originally published at 09:20 IST on 15 January 2025
Register to read our real-time news.Informist, Wednesday, Jan. 15, 2025
By Kshipra Petkar
MUMBAI – Net profit of Axis Bank is seen rising 6.1% on year to INR 64.41 billion for the quarter ended December, as per the average of estimates by 15 brokerage firms. Sequentially, the bottom line is seen falling by nearly 7%. Analysts expect growth to be muted in the reporting quarter due to a slowdown in loan growth and a marginal fall in asset quality. The bank will announce its earnings on Thursday.
Softer loan growth on a sequential basis is expected in Axis Bank, in line with industry trends, brokerages said. The loan growth is expected to be in the range of 1.8-4% on quarter. On a year-on-year basis, loan growth is seen in the range of 9-12%. Deposit growth is seen higher than loan growth and is expected in the range of 10-13% on year.
As on Sept. 30, the bank's net advances grew 11% on year to INR 9.99 trillion and the total deposits were up 14% on year to INR 10.87 trillion.
The net interest income of the private bank is seen rising 10% on year to INR 137.91 billion, as per the average of estimates by 15 brokerage firms. Sequentially, it is seen rising merely 2.3%. "NII (net interest income) growth will be in-line with average loan growth as the rise in yield on advances to be in tandem with rise in cost of deposits. Consequently, NIM will be stable sequentially," YES Securities said.
Few brokerages expect the net interest margin to fall sequentially. Elara Capital and Nuvama Wealth Management expect a 3-4 basis points fall in the overall margins. In Jul-Sept, the overall net interest margin was at 3.99% and the domestic net interest margin was 4.06%. The decline in margins could have been contributed by the stress in the credit-deposit ratio and the rising funding costs, reports said.
Provisions for the quarter could fall sequentially, as the bank had already made contingent provisions of INR 5.2 billion in the previous quarter. "These are entirely prudent and not for current or future NPA assets and should not be construed in any manner as the bank's assessment of its expected asset quality," the bank had said.
Analysts will remain watchful on the asset quality of the bank. The gross non-performing asset ratio stood at 1.44%, while the net NPA ratio stood at 0.34%, as on Sept. 30. Motilal Oswal expects the gross NPA ratio to inch up to 1.5% and the net NPA ratio to 0.5% as on Dec. 31. Emkay Global said that the rise in non-performing assets is due to stress in the unsecured book.
Kotak Institutional Equities expects slippages of INR 50 billion, mostly led by retail. In the previous quarter, the bank reported fresh slippages of INR 44.43 billion.
In the previous quarter, the bank's management said that they would remain cautious about early signs of stress in the credit card segment. During Jul-Sept, Axis Bank's credit card advances grew 22% on year, and it issued 1.06 million new cards, making it one of the highest credit card issuers in the country over the past eleven quarters, the lender said in the investor presentation.
On valuations, Nuvama said, "...while AXIS is likely to log lower-than-peers deposit growth and higher QoQ slippage, given the stock's underperformance, we believe downside risks are low." At 1028 IST, shares of Axis Bank were trading 1.7% lower at INR 1,033.25 on the National Stock Exchange.
Following are the Oct-Dec earnings estimates, in INR million, for Axis Bank based on reports from 15 brokerages:
| Brokerage Name | Net Interest Income (in INR million) | Net Profit (in INR million) |
| Anand Rathi Share and Stock Brokers Ltd. | 1,39,151.00 | 69,253.00 |
| Elara Securities (India) Pvt. Ltd. | 1,37,098.00 | 62,364.00 |
| Emkay Global Financial Services Ltd. | 1,37,934.00 | 65,401.00 |
| IDBI Capital Market Services Ltd. | 1,40,382.00 | 64,311.00 |
| JM Financial Institutional Securities Pvt. Ltd. | 1,37,112.00 | 66,884.00 |
| Kotak Institutional Equities | 1,37,488.00 | 62,484.00 |
| KR Choksey Research | 1,37,112.00 | 66,884.00 |
| Motilal Oswal Financial Services Ltd. | 1,36,557.00 | 63,894.00 |
| Nirmal Bang Equities Pvt. Ltd. | 1,39,048.00 | 62,241.00 |
| Nomura Equity Research | 1,36,100.00 | 62,400.00 |
| Nuvama Wealth Management Ltd. | 1,37,000.00 | 64,000.00 |
| Prabhudas Lilladher Pvt Ltd. | 1,39,059.00 | 64,363.00 |
| Sharekhan Ltd. | 1,38,310.00 | 62,260.00 |
| Systematix Shares and Stocks (India) Ltd. | 1,37,635.00 | 64,182.00 |
| YES Securities (India) Ltd. | 1,38,607.00 | 65,180.00 |
End
IST, or Indian Standard Time, is five-and-a-half hours ahead of GMT
Edited by Deepshikha Bhardwaj
For users of real-time market data terminals, Informist news is available exclusively on the NSE Cogencis WorkStation.
Cogencis news is now Informist news. This follows the acquisition of Cogencis Information Services Ltd by NSE Data & Analytics Ltd, a 100% subsidiary of the National Stock Exchange of India Ltd. As a part of the transaction, the news department of Cogencis has been sold to Informist Media Pvt Ltd.
Informist Media Tel +91 (22) 6985-4000
Send comments to feedback@informistmedia.com
© Informist Media Pvt. Ltd. 2025. All rights reserved.
To read more please subscribe
Share this Story:
