Analysts Expect Axis Bank’s Operating Expenditure To Remain High

Analysts Expect Reports: Axis Bank reported net income for the fourth quarter that beat the average analyst estimate. Growth in retail loans and lower provisioning aided the growth in net income.

Axis Bank Q4 FY22 (Standalone)

  • Net Interest income up 17% at Rs 8,815 crore Vs Rs 7,555 crore (YoY)
  • Net Profit up 54% at Rs 4,118 crore Vs Rs 2,677 crore (YoY) (Bloomberg estimate: Rs 3,909.5 crore)
  • GNPA: 2.82% vs 3.17% (QoQ)
  • NNPA: 0.73% vs 0.91% (QoQ)
  • Recommended dividend of Rs 1 per share of face value of Rs 2 each

Here’s the gist of the brokerages’ view on Axis Bank

Prabhudas Lilladher

  • Retains buy and slashes price target to Rs 940 fro Rs 975.
  • Profit beat was driven by lower provisions against bad loans.
  • Improving asset quality is a comfort, but operating expenditure may remain high.
  • Low likelihood of achieving guided RoE of 16% as margin recovery could take longer.

Motilal Oswal

  • Retains buy and maintains target price unchanged.
  • Lower provisions supported pick up in earnings.
  • Asset quality continues to improve.

Nirmal Bang

  • Operating profit was under pessure due to high investment in growth, technology.
  • Asset quality showed improvement and credit costs are expected to trend lower.

Source: Bloomberg

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