|Result Analysis: Axis Bank Limited (CMP: Rs.933)||Result Update: Q3FY23|
Axis Bank is the third largest private sector bank in India. The Bank offers the entire spectrum of financial services to customer segments covering Large and Mid-Corporates, MSME, Agriculture, and Retail Businesses. As of 31st December 2022, the Bank had a network of 4,849 domestic branches and extension counters situated in 2,734 centers compared to 4,700 domestic branches and extension counters situated in 2,665 centers as of 31st December 2021. As of 31st December 2022, the Bank had 15,674 ATMs and cash recyclers spread across the country. The Bank’s Axis Virtual Centre is present across six centres with over 1,500 Virtual Relationship Managers as on 31st December 2022.
|Market Cap. (Cr.)||287051|
|52 Wk. high/low||970 / 618|
|Book Value (Rs.)||416.91|
- Axis Bank has reported robust growth in net profits with an increase of 56.28% YoY and 10.38% QoQ for the December quarter’ 22 of Rs.6,209 cr.
- Net Interest Income of the bank grew by 29.40% YoY and 9.91% QoQ to Rs.22,843 cr. whereas Net Interest Margin increased by 30 bps on QoQ and 73 bps on YoY basis to 4.26%, albeit on the back of continued sub-par retail deposit growth.
- Banks’s total advances grew to Rs.7,82,852 cr. by 15.14% YoY in Q3FY23 compared to Rs.6,79,926 cr. in Q3FY22.
- Healthy loan growth delivered across all business segments , Credit Card advances grew 39% YOY, Personal loans grew 21% YOY & 3% QOQ , SBB grew 60% YOY & 8% QOQ, Rural loans grew 27% YOY , Mid-Corporate (MC) book up 42% YOY and 11% QOQ and SME + SBB + MC mix at ₹1,53,652 crores i.e. 20% of loans, was up by ~510 bps in last 2 years.
- Axis Bank showed declining NPA’s and gross slippages, moderate credit costs. GNPA is at 2.38% declined by 79 bps YOY & 12 bps QOQ, NNPA is at 0.47% declined 44 bps YOY & 4 bps QOQ. However fresh slippages increase by 12.53% QoQ.
- PCR is healthy at 81%; On an aggregated basis 3 , Coverage ratio is at 139% Annualized, gross slippage ratio declined by 56 bps YOY to 2.03%, net slippage ratio is at 0.93% Annualized credit cost for Q3FY23 is at 0.65% Non-recurring, one-time / prudent items impacted gross and net slippage by 22 bps and credit cost by 11 bps
- Bank’s domestic subsidiaries continue to deliver steady performance; annualized profit is at 1,252 crores, with a return on investment of 50% Axis Finance 9MFY23 PAT grew 35% YOY to 340 crores; asset quality remains stable, CAR is healthy at 22.2% Axis AMC 9MFY23 PAT grew 16% YOY to 292 crores, Axis Capital 9MFY23 PAT stood at 110 crores, and Axis Securities 9MFY23 PAT at 151 crores
|Promoters & Promoter Group||7.98|
- Amitabh Chaudhry, MD&CEO, Axis Bank commented, “In the midst of global uncertainty, India stands as a bright spot offering great stability and opportunities for the economy and businesses. The Banking sector is in a good position to leverage this great momentum built over the last few quarters. Axis Bank has been steadily enhancing its capabilities, buoyed by good business growth and great partnerships. The Citi merger has been shaping very well, and we are extremely happy with the response we are getting from customers and employees alike. We are excited to welcome them all to the Axis family.”
Axis Bank delivered a stable performance in 3QFY23, driven by better margins (4.3%), strong fee income traction (+18% QoQ), high other income and improving cost metrics. Business growth was healthy, led by the corporate segment. Asset quality continued to improve, even as slippages increased marginally, especially from the retail portfolio, but were compensated by healthy recoveries and upgrades. The restructured book improved further, while a higher provisioning buffer provided comfort, the bank needs to conservatively build its provisioning buffer, especially to cover for retail slippages, which have been steadily inching up. The bank reported EPS of Rs.52.67 for 9MFY23, and we expect the company to clock in the EPS of Rs.70.23 for FY23
|Particulars (In Rs. Cr.)||Q3FY23||Q2FY23||Q3FY22||QoQ %||YoY%||9MFY23||9MFY22||YoY%|
|Net Interest Income||11,749||10,633||8,858||10.50%||32.64%||32,010||24,878||28.67%|
|Net Profit after tax||3,807||3,383||4,147||12.53%||-8.20%||16,224||9,730||66.74%|
|Ratios (%)||Q3FY23||Q2FY23||Q3FY22||QoQ %||YoY%|
|Gross NPA||2.38%||2.50%||3.17%||-12bps||-79 bps|
|Net NPA||0.47%||0.51%||0.91%||-4 bps||-44 bps|
|Provision Coverage Ratio||81%||80%||72%||100 bps||900 bps|
|Net Interest Margin||4.26%||3.96%||3.53%||30 bps||73 bps|
|Capital Adequacy Ratio||17.6%||16.52%||17.44%||108 bps||16 bps|
|CASA Ratio||44%||43.52%||43.82%||48 bps||18 bps|
|Segment Income (In Cr.)||Q3FY23||Q2FY23||Q3FY22||QoQ %||YoY%||9MFY23||9MFY22||YoY%||Segment %|
|Whole sale banking||23,723||22,263||18,512||6.56%||28.15%||65,976||53,310||23.76%||57.11%|
|Other banking operations||903||825||852||9.45%||5.99%||2,421||2,112||14.63%||2.17%|
|Less: Inter-segment revenue||13,452||11,718||9,851||14.80%||36.55%||35,696||28,634||24.66%||–|
|Income from Operations||28,084||25,259||22,091||11.18%||27.13%||76,029||63,114||20.46%||–|
Source: Company website, EWL Research
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