BQ Blue's special research section collates quality and in-depth equity and economy research reports from across India's top brokerages, asset managers and research agencies. These reports offer BloombergQuint's subscribers an opportunity to expand their understanding of companies, sectors and the economy.
ICICI Securities Report
Axis Bank Ltd.'s Q2 FY22 earnings surprised positively on portfolio quality-
despite elevated slippage (3.5% versus 4% in FY21) recoveries, upgrades pulled gross non performing assets down 32 basis points QoQ to 3.53%;
restructuring at mere 0.64%; and
credit cost contained at 1.4% (better than our estimate of 1.7%) reinforces adequacy of existing buffer.
However, this was offset by-
growth momentum lagging peers;
portfolio mix shift weighing further on net interest margins (down 7bps QoQ to 3.39%);
operating cost being elevated with 36% YoY/17% QoQ growth.
Axis Bank's moderating credit cost trend is encouraging and now growth acceleration coupled with net interest margin improvement would be critical triggers to deliver superior return on equities.
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