Axis Bank Q2 Results Preview: Net profit likely to rise 12% YoY to ₹5,970 crore; margin to remain under pressure

livemint.com:

Axis Bank will announce its financial results for the second quarter of FY24 on October 25, 2023, Wednesday. The private sector lender is expected to report decent profit growth with a rise in net interest income, but margins are likely to remain under pressure, in line with a broader trend in the overall banking sector. The banking sector’s overall credit growth remains healthy at 15% YoY in Q2FY24, mainly led by unsecured loans and some pick-up in corporate credit.

Deposit growth has also picked up to 13% YoY, benefiting from the RBI’s mini demonetization of ₹2,000 notes and higher term deposit rate offerings by banks, which coupled with accelerating CASA cannibalization is expected to shore-up funding cost. Axis Bank is expected to see a 12% year-on-year (YoY) rise in its net profit in the quarter ended September 2023 to ₹5,970 crore from ₹5,329.8 crore in the corresponding quarter of last year. Also Read: ICICI Bank Q2 results: Net profit rises 35.8% YoY at ₹10,261 crore, NII increase by 23.8% at ₹18,308 crore The lender’s net interest income (NII) in Q2FY24 is likely to grow by 15% to ₹11,914 crore from ₹10,360.3 crore, YoY.

Net interest margin (NIM) is expected to be marginally lower sequentially due to higher cost of funds. After a sharp margin downtrend in the past two quarters, the bank expects margin contraction to be contained in Q2. “This coupled with contained provisions is expected to support profitability.