axis financial institution: Axis Bank This fall Preview: Revenue might soar over 40%, NII progress above 20%

NEW DELHI: is prone to report over 40 per cent year-on-year (YoY) rise in revenue for the March quarter on a 20 per cent plus progress in web curiosity revenue (NII). Net curiosity margin (NIM) is seen bettering marginally, aided by recoveries.

All eyes can be on the administration commentary on asset high quality and BB and under guide, mentioned analysts.

Sharekhan expects the financial institution to report a 44.3 per cent YoY rise in revenue at Rs 3,864 crore in contrast with Rs 2,677 crore in the identical quarter final yr. NII is seen rising 22.7 per cent YoY to Rs 9,269 crore in contrast with Rs 7,555 crore within the corresponding quarter final yr.

Pre-provision working revenue is seen rising a mere 2.7 per cent YoY to Rs 7,052 crore.

“Advances might develop 14 per cent YoY and seven per cent QoQ with a concentrate on the retail and SME segments. NIM might witness marginal enchancment at 3.9 per cent, aided by higher-yielding mortgage segments.

Kotak Institutional Equities mentioned revenue for the quarter might rise 51.1 per cent YoY to Rs 4,045 crore, whereas it sees NII rising 22.4 per cent to Rs 9,246 crore.

“We expect loan growth at 15 per cent YoY, similar to other frontline banks, with a greater focus on retail and SME. NIM to be stable or marginal improvement led by a shift towards higher-yielding loans. We see operating profit growth at 3 per cent YoY, primarily due to lower treasury income and normalisation of operating expenses,” Kotak mentioned.

ICICI Securities, which sees revenue rising 48 per cent YoY to Rs 3,957 crore, mentioned business credit score demand provides confidence that Axis Bank, too, would take part within the alternative and register a 7 per cent QoQ uptick.

“Even on a high base of Q4FY21, this would translate to 16 per cent YoY growth. Sustained focus on secured retail segments, better-rated corporate and tech-driven transformation initiative ‘Sankalp’ for MSME should aid overall growth. With stable NIMs, even if NII grows 5-6 per cent QoQ, this would effectively mean over 20 per cent NII growth. Operating expense growth is likely to be elevated at 20 per cent,” the brokerage mentioned.

The brokerage expects slippages to reasonable at 2.3 per cent for H2FY22 from 3.8 per cent in H1FY22. It sees credit score value run-rate to be steady QoQ.

In worth phrases, Kotak sees slippages at Rs 3,500 crore , about 2.2 per cent of loans. It can be principally led by retail.

“We expect strong commentary on asset quality performance and see an improvement in NPL ratios aided by stronger recovery/upgradations. Provisions are mainly to reduce net NPL ratios,” it mentioned.

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