Will Axis Bank Emulate HDFC Bank Performance?

Private bank major Axis Bank will declare its financial results on Monday. Analysts tracking banking sector expect the Bank to report a drop in net profit.

Axis Bank is one of the star performers at the bourses. The stock gave a return of 14.42 per cent year-to-date and for three-year and 10-year period, the returns were 33.23 per cent and 250.66 per cent respectively.

Ahead of the result, Axis Bank October futures shed about 24.19 lakh shares, down 4 per cent, over the previous day. Markets will resume trading on Tuesday, as Monday is closed holiday in Mumbai on account of assembly elections in Maharashtra.

In a note, HDFC Securities expects net earnings of Rs 650 crore, which is a sharp fall of 17.8 per cent y-o-y and 53 per cent Q-o-Q. However, it expects net interest income to grow 12.7 per cent y-o-y at Rs 5,900 crore.

Elara Securities sees Axis Bank's adjusted net profit to dip 14.1 per cent at Rs 677.90 crore, as against year-ago's Rs 789.60 crore. The brokerage firm too expect the top line to grow 14.7 per cent at Rs 9,073.70 crore (Rs 7,910.50 crore).

Motilal Oswal Financial Services analysts expect Axis Bank's July-September quarter PAT at just Rs 541 crore.

However, Prabhudas Lilladher said, it expects core performance for Axis Bank will continue to improve with likely NII growth of 16 per cent Y-o-Y and (pre-provisioning operating profit) PPOP growth of about 33 per cent.

Credit cost is likely to be at 240 bps as Bank may look to enhance PCR & provisions required on fresh slippages, it said and added it passed through tax rate benefit in Q2, while capital raise of Rs 13,000 crore will act as cushion on higher provisions.

In September, private sector lender had raised funds through qualified institutional placement from large foreign and local investors. It expects the Bank to report a PAT of Rs 1,578.30 crore, almost double y-o-y, from about Rs 790 crore