Recommendation: Buy
Target price: Rs940
Axis Bank is likely to report a healthy performance for the March 2022 quarter. The bank’s loan growth pegged at ~16% on a year-on-year
basis. Rising share of corporate loans and superior growth in unsecured loans could outline the quarterly performance. Consequently, net interest income (NII) could grow 21% over the year-ago quarter.
Despite marginal increase in operational expenses on a sequential basis, margins could remain unchanged at 3.5%.
Slippages are likely to moderate aiding the bank’s gross NPA ratio. Amid stable provisions, credit costs are expected to remain under check.
Profit After Tax (PAT) could grow 38% over the year-ago quarter, and will be aided by decline in provisions.
Important management insights to watch out for:
·        Credit demand across segments
·        Trends in restructuring, asset quality of BB & below rated loan accounts
·        Outlook on net interest margin
Â
|
Rs Billion |
March 2022 estimates |
QoQ change |
YoY change |
|
Net Interest Income (NII) |
91.1 |
5% |
21% |
|
Total Income |
131.1 |
5% |
18% |
|
Pre-Provisioning Operating Profit |
62.6 |
2% |
9% |
|
Profit After Tax (PAT) |
36.9 |
2% |
38% |
Source: IIFL Research
#Q4FY22 #Preview #Axis #Bank #NII #Rs911 #billion #PAT #Rs369 #billion
( With inputs from indiainfoline)
