MUMBAI - Axis Bank, one of India's leading private sector banks, is expected to release its third-quarter financial results for the fiscal year 2024, showing promising growth amidst challenging market conditions. The bank is anticipated to report an 8.6% year-on-year increase in net interest income (NII), reaching ₹124,553 million ($1 = ₹83.11) for Q3 FY24. Additionally, the net profit is projected to rise by 6% to ₹62,120 crore.
Despite the positive growth in NII and net profit, the bank is facing headwinds due to elevated funding costs, which are expected to compress net interest margins (NIMs) to 3.9%. Nevertheless, Axis Bank's asset quality is projected to remain robust. The gross non-performing assets (NPAs) ratio is likely to show an improvement, decreasing to 1.7%, and the net NPAs ratio is expected to tighten further to 0.4%.
The projections, however, indicate that the bank might see minimal treasury gains during this period. Additionally, the number of recoveries and upgrades is expected to be lower compared to previous quarters. Despite these factors, the overall financial health of Axis Bank appears to be strong, with significant growth in key areas and a stable outlook for asset quality.
InvestingPro Insights
As Axis Bank gears up to announce its third-quarter financial results, several key metrics and insights from InvestingPro provide a deeper understanding of the bank's performance and outlook. Notably, InvestingPro Tips suggest that while Axis Bank is expected to see net income growth this year, it is also facing challenges such as quickly burning through cash and weak gross profit margins. These insights align with the anticipated compression in net interest margins due to elevated funding costs.
InvestingPro Data also highlights that Axis Bank is trading near its 52-week high, indicating strong market confidence in its performance. Moreover, analysts have a positive outlook, predicting the bank will be profitable this year and noting its profitability over the last twelve months. This is complemented by a high return over the last decade, positioning Axis Bank as a prominent player in the Banks industry.
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