Axis Financial institution Q2 Preview: Revenue could fall as much as 5% QoQ on decrease NII revenue

Main non-public lender Axis Financial institution is predicted to publish double-digit development in internet curiosity revenue (NII) on a year-on-year (YoY) foundation, however the numbers is probably not comparable with final yr’s interval as a consequence of Citi’s acquisition.

On a quarter-on-quarter (QoQ) foundation, NII is prone to be flattish, and internet revenue is seen declining (as much as 5%) for the July-September interval.

Analysts are constructing in mortgage development of three% QoQ, and internet curiosity margins (NIMs) could decline as much as 23 foundation factors QoQ because of the greater price of deposits. Within the current first quarter, the financial institution posted a internet revenue of Rs 5,797 crore, up 40% YoY. The financial institution’s internet curiosity revenue throughout the identical interval grew 27% YoY to Rs 11,959 crore.

Here is what analysts anticipate from Axis Financial institution’s Q2

Kotak Institutional Equities
We anticipate the mortgage combine to be a bit extra favorable towards higher-yielding loans, as seen in current quarters. Anticipate slippages of Rs 4,200 crore (2% of loans), principally led by the retail section.
Tendencies on slippages and general asset high quality shouldn’t be too worrisome and broadly steady. We anticipate the financial institution to make greater provisions for the bills of the merger. Citi integration, near-term development traits, and the progress of NIM would be the key dialogue areas for the quarter.

Loans are anticipated to develop by 4% QoQ. NIM is prone to be flat-higher QoQ, resulting in a probable NII development of two.4% QOQ. Opex to stay elevated.

Motilal Oswal
Anticipate credit score prices to stay beneath management. The price ratios are anticipated to be elevated. Margin will possible be beneath stress. Anticipate enterprise development to stay wholesome.Prabhudas Lilladher
Mortgage development may very well be at 3% QoQ. NIM is prone to be decrease at 23 bps QoQ to three.95% as a consequence of price of funds catching up. PPoP (pre-provision working revenue) is predicted to say no by 6.1% QoQ. Provisions might rise by 16% QoQ to Rs 1200 crore.

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