Axis Bank slips over 1% ahead of Q1 results today; here's what to expect

Emkay Global expects the net profit to zoom 97 per cent YoY and contract 18 per cent QoQ at Rs 2,196 crore

Shares of private lender Axis Bank slipped 1.3 per cent in intra-day deals on Monday ahead of the bank’s June quarter (Q1FY22) results announcement due later in the day. At 9:27 AM, the stock was trading 0.4 per cent lower as against a 0.06 per cent rise in the benchmark S&P BSE Sensex.
 

In three-months to June, the scrip of the Mumbai based lender advanced 7 per cent on the BSE, in-line with the Sensex’s rally. It, however, outperformed the BSE Bankex index’s around 4 per cent gain during the period, ACE Equity data show. 
 

Here’s what leading brokerages expect from the results:

Nomura

The brokerage is building in a net interest income (NII) growth of 18.6 per cent year-on-year (YoY) at Rs 8,285.2 crore on the back of a 0.5 per cent QoQ and 11.7 per cent YoY growth in loan book at Rs 6.27 trillion. 
 

Further, they expect a marginal operating profit growth of 0.8 per cent sequentially, at Rs 6,918 crore, aided by higher NII, while net profit is pegged at Rs 2,848.3 crore, up 156 per cent YoY and 6.4 per cent QoQ.
 

HSBC

This global brokerage expects Axis Bank’s PAT to decline 6 per cent QoQ to Rs 2,513.8 crore from Rs 2,677.1 crore reported in Q4FY21. On a yearly basis, however, it would be a rise of 126 per cent from Rs 1,112 crore reported in Q1FY21.
 

While loan book is seen slipping 1 per cent sequentially to Rs 6.17 trillion, NII is estimated to stay stable at Rs 7,608 crore. NII was Rs 7,555 crore in Q4FY22 and Rs 6,985.3 crore in Q1FY21.
 

Emkay Global

Analysts at the brokerage expect operating profit to stand at Rs 6,235.6 crore during the quarter under review on the back of moderate growth and lower fees. The same was Rs 5,844.4 crore in the previous year quarter and Rs 6,864.6 crore in the March quarter of FY21.
 

The net profit, meanwhile, is seen zooming 97 per cent YoY and contracting 18 per cent QoQ at Rs 2,196 crore.
 

“The Bank may try to upfront non-performing asset (NPA) recognition/provisioning and preserve contingent buffer for the rest of the year. Slippages could remain elevated led by retail/SME book and one-odd corporate NPA,” they noted in an earnings preview report.
 

Prabhudas Lilladher

It expects NII growth of 11 per cent YoY but better QoQ at 3 per cent (at Rs 7,771.9 crore) supported by lower cost of funds and higher interest reversals in Q4FY21. That apart the operating profit and net profit are projected at Rs 6,461.1 crore and Rs 2,387.1 crore, respectively.
 

On the asset quality front, the brokerage expects provisions to decline relative to last year but remain similar sequentially on conservatism. In absolute terms, it is pegged at Rs 3,248.3 crore compared with Rs 4,416.4 crore set aside last year and Rs 3,295 crore in Q4FY21.
 

Gross NPA ratio is seen improving at 3.65 per cent, down from 3.7 per cent QoQ and 4.72 per cent YoY.