Axis Bank has reported its Q2 results for the financial year 2024, revealing a significant increase in profit after tax (PAT) and net interest income (NII). On October 17, 2024, the bank announced that its PAT rose by 18% year-on-year to reach Rs 6,918 crore. This impressive growth was bolstered by a 9% increase in NII, which stood at Rs 13,751 crore.
Main Points
Key Financial Highlights
- Profit After Tax (PAT): Rs 6,918 crore, up 18% YoY.
- Net Interest Income (NII): Rs 13,751 crore, reflecting a growth of 11.7% YoY.
- Net Interest Margin (NIM): Approximately 4%, a slight decrease from previous quarters.
- Loan Growth: The bank’s loans grew by 11% YoY, indicating strong demand in the lending sector.
- Provisions: Provisions for the quarter were noted at around Rs 1,529.5 crore, which is an increase of nearly 88% YoY.
Performance Analysis
The results indicate that Axis Bank has maintained a robust performance despite challenges in the financial landscape. The growth in PAT is attributed to several factors:
- Increased Lending Activity: The bank’s loan book expanded significantly, showcasing strong demand across various sectors.
- Higher NII: The rise in NII reflects effective management of interest income and costs associated with deposits.
- Controlled Slippages: While slippages are expected to rise slightly year-on-year, they have decreased on a sequential basis, indicating improved asset quality.
Market Reactions
Following the announcement of its Q2 results, Axis Bank’s shares have been under scrutiny. The stock had seen a decline of nearly 3% leading up to the earnings report. Analysts remain cautiously optimistic about the bank’s outlook. They expect continued growth but also caution against potential pressures from rising costs and competition.
Analyst Expectations
Brokerages have varied expectations regarding Axis Bank’s performance moving forward:
- Kotak Institutional Equities anticipates that while loan growth will remain strong, NIM may face pressure due to rising costs of funds.
- YES Securities projects a stable outlook for fee income growth, although it may lag behind overall business growth.
- Analysts are particularly focused on monitoring slippages and recovery rates in the retail segment.
Future Outlook
Looking ahead, Axis Bank is expected to continue its growth trajectory. Analysts predict that the bank will focus on enhancing its digital banking capabilities and expanding its retail loan offerings. There is also an emphasis on maintaining asset quality while navigating through potential economic headwinds.
The management’s commentary during the earnings call will be crucial for investors seeking insights into future strategies and performance expectations.
