Axis Bank reported a net profit of ₹6,035 crore for the quarter that ended in June 2024, which represents an increase from ₹3,452 crore for the same period in the previous fiscal year. On the other hand, from ₹7,130 crore in the March quarter, the bank’s net profit decreased by 15%.
Axis Bank Share News: Following the release of Axis Bank’s Q1 2024 results, the private sector lender’s stock fell nearly 7% in early trading on Thursday. On the BSE, The share price of Axis Bank dropped approximately 7% to ₹1,157.65 a share.
In the quarter that ended in June 2024, Axis Bank reported a net profit of ₹6,035 crore, which represents an increase from ₹3,452 crore in the same period in the previous fiscal year. On the other hand, from ₹7,130 crore in the March quarter, the bank’s net profit decreased by 15%.
Year over year (YoY), net interest income (NII) increased to ₹13,448 crore in Q1FY25 from ₹11,959 crore, but net interest margin (NIM) decreased to 4.05% from 4.10% in the previous year.
The gross non-performing assets (NPA) ratio of Axis Bank grew 11 basis points (bps) to 1.54%, while the net NPA ratio jumped 3 bps to 0.34%, indicating a weakening of the bank’s asset quality.
In addition to moderating costs, the bank’s management believes that the greater NPA generation was an anomaly and should trend down, which should help offset any pressure on margins and leveraged loans.
What Experts Said About Axis Bank
Axis Bank reported a 10% loss in earnings, somewhat offset by lower opex and a larger LLP (0.9% of loans) due to greater NPAs and slower recoveries. PAT and ROA were both lower. Anand Dama, Senior Research Analyst at Emkay Global Financial Services, stated, “Credit growth was relatively moderate, but better LDR, a rising share of unsecured loans, and a one-time interest on IT refund helped Axis report flattish NIMs at 4.1%.”
Building on the Q1 loss and the growing chatter around unsecured loans and LLP, Emkay Global lowers its earnings expectations for FY25–27E by approximately 3%. Yet, it still anticipates the bank to record a strong return on assets of about 1.8%. The Axis Bank has adopted an enabling resolution to raise equity capital to about ₹20,000 crore, which should keep RoE in check because CET 1 is less than 15%.
Should You Buy It or Not?
For Axis Bank, Emkay Global maintained a “Buy” rating with a target price of ₹1,400 per share.
Loan growth at Axis Bank was 14.2% YoY, compared to a 12.8% YoY increase in deposits.
Brokerage firm JM Financial feels Axis Bank’s liabilities franchise is holding up well over the medium run, despite the current adverse climate regarding deposits that limit growth posture.
JM Financial stated that it will take advantage of any significant correction to increase its exposure to the stock while maintaining its favorable position on Axis Bank shares. The brokerage firm kept its buy recommendation for Axis Bank stock at ₹1,375 per share.
At 2:00 P.m., The share price of Axis Bank traded nearly 7% lower at ₹1,157.65 apiece on the BSE.
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