Can weak operational performance in Q4 delay Axis Bank's re-rating?

Axis Bank Q4 result review: Analysts do not expect valuation to catch up with peers in light of the NII undershoot, impending dilution to fund the Citi deal, and higher operating expenditure guidance.

Axis Bank shares plunged 6.5 per cent to Rs 729 apiece on the BSE on Friday as lower-than-expected growth in net interest income (NII), and a surprising margin compression worried the Street. In comparison, the benchmark S&P BSE Sensex index slipped 0.8 per cent.

"Axis Bank reported a mixed bag in Q4FY22. While net profit of Rs 4,118 crore outperformed, driven by lower credit cost, NII undershot by growing just 1.9 per cent QoQ/17 per cent YoY, missing Bloomberg consensus by 3.5 per cent, and lagging HDFC Bank’s 2 per cent and ICICI’s 3 per cent," said analysts at Edelweiss Securities.

They,