Earnings Outlook
Axis Bk Jan-Mar PAT seen down 6% YoY on weaker loan growth
This story was originally published at 20:54 IST on 22 April 2025
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By Kshipra Petkar
MUMBAI – Axis Bank's net profit for the final quarter of 2024-25 (Apr-Mar) is seen lower than a year ago due to muted loan growth and provisions staying high. For Jan-Mar, the private bank's bottom line is seen 6% lower on year at INR 67.13 billion, according to the average of the estimates of 17 brokerages. The net interest income is seen rising nearly 9% year-on-year to INR 142.26 billion.
"We expect slower credit growth, coupled with elevated provisions, to keep earnings growth in check. Slippages could moderate QoQ (quarter-on-quarter), but recoveries remain soft from the 1Q pool," Emkay Global Financial Services said in a pre-earnings note. Emkay has a 'buy' recommendation on Axis Bank with a target price of INR 1,400. On Tuesday, the lender's shares ended 0.5% lower at INR 1,216.80 on the National Stock Exchange.
Axis bank will announce its earnings on Thursday.
In Oct-Dec, Axis Bank's net interest income had risen 9% to INR 136.06 billion, with advances up 9% as at the end of December. Analysts see the private sector bank reporting softer loan growth as at the end of March than its peers, primarily due to weaker deposit growth.
On the margin front, Axis Bank is expected to post a marginal decline from the 3.93% overall figure it had reported for Oct-Dec. According to Dolat Capital, the net interest margin may moderate by 5 basis points "as improved share of higher yielding focus segments partly offset the impact of rate cuts". However, Kotak Institutional Equities expects the margin to fall by a steeper 15 bps to around 3.8% due to the impact of the rate cut cycle. The bank's management has guided for a long-term NIM of 3.8%.
In terms of asset quality, Axis Bank's fresh slippages in Jan-Mar are seen at around INR 50 billion, little changed from INR 54.32 billion in Oct-Dec, with the retail portfolio being the main culprit. As such, provisions are seen elevated, with Nomura Equity Research forecasting credit cost to be "contained at 0.9%". Nomura has a 'buy' rating on Axis Bank with a target price of INR 1,230. In Oct-Dec, the bank's credit cost net of recoveries in written-off accounts was 0.80%.
Following are the Jan-Mar earnings estimates for Axis Bank based on reports from 17 brokerage firms in descending order by the estimate of net profit:
Brokerage | Net interest income (in INR million) | Net profit (in INR million) |
Motilal Oswal Financial Services | 1,38,466.00 | 71,873.00 |
PhillipCapital (India) | 1,37,515.00 | 69,411.00 |
Dolat Capital Market | 1,36,761.00 | 69,068.00 |
Sharekhan | 1,38,410.00 | 68,420.00 |
Nirmal Bang Equities | 1,37,592.00 | 67,729.00 |
Anand Rathi Share and Stock Brokers | 1,38,269.00 | 66,931.00 |
IDBI Capital Market Services | 1,41,370.00 | 66,890.00 |
Emkay Global Financial Services | 1,38,076.00 | 66,861.00 |
YES Securities (India) | 1,38,987.00 | 66,803.00 |
Equirus Securities | 1,40,110.00 | 66,607.00 |
Kotak Institutional Equities | 2,01,801.00 | 66,279.00 |
ICICI Securities | 1,38,169.00 | 66,106.00 |
Prabhudas Lilladher | 1,40,356.00 | 66,051.00 |
IIFL Capital Services | 1,38,500.00 | 65,800.00 |
Nomura Equity Research | 1,39,900.00 | 65,800.00 |
Elara Securities (India) | 1,39,619.00 | 65,353.00 |
JM Financial Institutional Securities | 1,34,567.00 | 65,309.00 |
AVERAGE | 1,42,262.82 | 67,134.76 |
End
Edited by Avishek Dutta
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