Axis Bank shares were up 0.5 percent on the April 24 morning ahead of the March quarter result announcement.
India’s third-largest private sector lender is expected to report a net profit of Rs 6,098 crore against a loss of Rs 5,728 crore in the year-ago period, an average of five brokerage estimates show.
In the previous financial year, Axis Bank completed the merger of Citi Bank's India consumer division, which weighed on net profit.
Sequentially, the profit is expected to be flat on the back of high base and lower treasury income.
Its net interest income (NII) is pegged to rise 8.3 percent YoY to Rs 12,728 crore. Sequentially, NII is likely to rise by a percent from Rs 12,530 in the December quarter.
Margins to remain under pressure
At a time when the country’s biggest private sector lender HDFC Bank reported recovery in margins, higher cost of deposits is expected to dent Axis Bank's margins, analysts said.
Kotak Institutional Equities expects Axis Bank's margins to fall 10 basis points (bps) to 3.95 percent in Q4FY24.
One basis point is one-hundredth of a percentage point.
1.6 percent from 2 percent in the year-ago period, analysts at Motilal Oswal said. Net NPA is expected to remain stable at 0.4 percent in the March-ended quarter, they added.
Deposits are expected to rise 13.8 percent on-year to Rs 10.8 lakh crore, while loans are likely to grow by 15.6 percent to Rs 9.8 lakh crore, Motilal Oswal said.
The brokerage firm shared a “neutral” rating on the lender, with a target price of Rs 1,175 per share.
The management's commentary on Citi integration, near-term growth trends, and progress in margins would be closely tracked.
At 11.53 am, the stock was trading at Rs 1,062.70 on the National Stock Exchange, up 0.66 percent from the previous close.
The stock has declined over 3 percent this year against a 3 percent gain in the benchmark Nifty.
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