Axis Bank stock: On the morning of April 24, Axis Bank shares rose by 0.5 percent as investors anticipated the announcement of the March quarter results.
The third-largest private sector lender in India is projected to post a net profit of Rs 6,098 crore, contrasting with a loss of Rs 5,728 crore in the corresponding period of the previous year, according to an average of five brokerage estimates.
Axis Bank’s net profit was impacted in the previous financial year due to the completion of the merger with Citi Bank’s India consumer division. -Axis Bank stock
The profit is anticipated to remain steady sequentially, primarily due to a high base and reduced treasury income. Net interest income (NII) is forecasted to increase by 8.3 percent year-on-year to Rs 12,728 crore. Sequentially, NII is expected to experience a one percent increase from Rs 12,530 crore in the December quarter.
Margins will remain under pressure.
Analysts predict that while HDFC Bank, the country’s largest private sector lender, has seen an improvement in margins, Axis Bank may face margin pressure due to higher deposit costs. Kotak Institutional Equities forecasts a decline of 10 basis points (bps) in Axis Bank’s margins to 3.95 percent in Q4FY24.
To clarify, one basis point equals one-hundredth of a percentage point.
According to analysts at Motilal Oswal, Axis Bank is expected to witness an improvement in its gross non-performing assets (NPAs), decreasing to 1.6 percent from 2 percent in the previous year. They anticipate that net NPAs will remain steady at 0.4 percent in the quarter ending March.
Furthermore, Motilal Oswal predicts a 13.8 percent year-on-year increase in deposits to Rs 10.8 lakh crore, while loans are projected to grow by 15.6 percent to Rs 9.8 lakh crore.
The brokerage firm has given a “neutral” rating to the lender, with a target price set at Rs 1,175 per share.
Investors will closely monitor the management’s remarks regarding the integration of Citi, short-term growth patterns, and margin advancements.
As of 11:53 am, the stock was trading at Rs 1,062.70 on the National Stock Exchange, marking a 0.66 percent increase from the previous close.
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This year, the stock has depreciated by over 3 percent, contrasting with the benchmark Nifty’s 3 percent ascent.
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