Axis Bank Q2 FY25 Results Preview: NII Growth Expected, But Profitability May Be Subdued Due to Lower Provisions

Axis Bank is set to announce its Q2 FY25 financial results on October 17, 2024. Several brokerages predict a mixed performance, with muted profitability primarily due to lower provisions and rising deposit costs. Here’s what the brokerages are forecasting for the quarter:

1. Yes Securities:
   • Sequential loan growth is projected to be around 3.5%.
   • Net Interest Income (NII) growth will likely be slower than loan growth, impacted by rising deposit costs.
   • Net Interest Margin (NIM) is expected to decline slightly.
   • Slippages and provisions will decrease sequentially due to seasonality.
2. KRChoksey Research:
   • NII is expected to grow by 8.7% YoY, driven by 12.1% YoY growth in advances.
   • Deposit growth is anticipated at 15.1% YoY, outpacing loan growth.
   • NIM is expected to drop by 15 basis points due to higher costs.
   • Profitability may increase by 6.5% YoY, supported by lower provisions.
3. IDBI Capital:
   • NII is projected to grow by 10.8% YoY, with 13% growth in advances and 14% in deposits.
   • The focus will be on maintaining profitability and improving margins, while asset quality remains a key area of concern.
4. Kotak Institutional Equities:
   • Loan growth is expected to be 11% YoY, with stable NIM at 3.8%.
   • Fee income growth might be sluggish, reflecting slower loan growth.
   • Slippages, particularly from the retail segment, are expected to be around Rs 5,000 crore, with deposit mobilization being another focus area.

Previous Performance: In Q1 FY25, Axis Bank’s NII grew by 12% YoY, reaching Rs 13,448 crore, and the bank’s net profit rose by 4% YoY to Rs 6,035 crore. The net interest margin (NIM) for the quarter stood at 4.05%.

Disclaimer:
The information provided in this post is based on market reports and brokerage estimates. It is intended for informational purposes only and should not be considered financial advice. Investors are advised to conduct their own research or consult with a financial advisor before making any investment decisions. The author and the sources mentioned are not responsible for any losses or liabilities incurred based on the information provided.