Axis Bank Q3 Results Review - Earnings Inline; Remain Watchful On Growth, Net Interest Margins: Motilal Oswal

NDTV Profit’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 NDTV Profit’s subscribers an opportunity to expand their understanding of companies, sectors and the economy..Motilal Oswal Report.Axis Bank Ltd. reported in-line profit after tax at Rs 60.7 billion (up 4% YoY/3.5% QoQ) in Q3 FY24, driven by healthy other income, which was partly offset by an increase in provisions due to alternative investment fund-related provisioning. Net interest margins moderated 10 basis points QoQ to 4.01%. The management has suggested that funding costs will continue to inch up over the next two quarters. Loan growth was healthy at 22% YoY/3.9% QoQ, while deposit growth was robust at 5% QoQ. The credit/deposit ratio moderated 110 bp QoQ to 92.8%. Fresh slippages increased to Rs 37.2 billion, whereas healthy recoveries led to a decline in the gross non-performing asset ratio. The restructured book was under control at 0.18%. We cut our FY25E earnings per share by ~8% considering an increase in costs and margin pressures. Moreover, with a high CD ratio being of ~93%, we estimate Axis Bank to deliver a 15.7% compound annual growth rate in loans over FY24-26E, slower than peers’. Accordingly, we estimate FY25 return on asset/return on equity of 1.7%/17.4%. We downgrade our rating on Axis Bank to 'Neutral' with a revised target price of Rs 1,175 (1.8 times September-25E adjusted book value)..Click on the attachment to read the full report:.Axis Bank Q3 Results: Higher Operating Expenses Weigh On Profit.DISCLAIMERThis report is authored by an external party. NDTV Profit does not vouch for the accuracy of its contents nor is responsible for them in any way. The contents of this section do not constitute investment advice. For that you must always consult an expert based on your individual needs. The views expressed in the report are that of the author entity and do not represent the views of NDTV Profit..Users have no license to copy, modify, or distribute the content without permission of the Original Owner.

Axis Bank Q3 Results Review - Earnings Inline; Remain Watchful On Growth, Net Interest Margins: Motilal Oswal

Cost ratios to remain elevated

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