Axis Bank’s stock price has remained stable, and it could potentially experience more downward movement. It’s anticipated that Axis Bank will witness a 12% year-on-year increase in its net profit.
On Wednesday, Axis Bank’s stock price remained steady as it awaited its earnings report for the period ending on September 30, 2023. The opening price for Axis Bank shares today was ₹963.45 on the BSE. As of 9:30 AM IST, Axis Bank’s shares had increased by 0.34% to reach ₹966.70 each.
Rajesh Bhosale, an Equity Technical and Derivative Analyst at Angel One, commented on the recent price movement, saying, “Axis Bank’s stock price has recently experienced a significant correction. We are now observing the formation of a Lower Top Lower Bottom pattern on the daily chart. In the near term, we may witness further correction with ₹940 as the immediate support level. Any rebound might encounter resistance around the ₹1,000 mark.”
The private sector lender is expected to report reasonable profit growth and an increase in net interest income, according to street estimates. However, like the broader banking industry, Axis Bank’s margins are likely to continue facing pressure.
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In the second quarter of the fiscal year 2024, the banking industry saw a strong credit growth of 15% year-on-year (YoY). This growth was primarily driven by unsecured loans, with a slight improvement in corporate credit. The Reserve Bank of India’s decision to demonetize ₹2,000 notes to a limited extent, along with higher term deposit rates offered by banks, contributed to a 13% YoY increase in deposit growth. Additionally, there was an acceleration in the shift from Current Account and Savings Account (CASA) deposits to other financing sources, which is expected to help manage financing costs.
Axis Bank is anticipated to achieve a 12% YoY increase in net profit for the quarter ending in September 2023, reaching ₹5,970 crore, up from ₹5,329.8 crore in the same period the previous year.
The bank’s net interest income (NII) in the second quarter of the fiscal year 2024 is projected to grow by 15%, reaching ₹11,914 crore, compared to ₹10,360.3 crore in the previous year. The net interest margin (NIM) is expected to be slightly lower sequentially due to increased fund costs.
In the quarter ending June, Axis Bank reported a consolidated net profit of ₹5,797 crore, which was 41% higher than the ₹4,125 crore reported in the corresponding quarter of the previous fiscal year. The bank’s net interest income (NII) surged by 27%, increasing from ₹9,384 crore in the first quarter of fiscal year 2023 to ₹11,958 crore during the quarter ending in June 2023. The net interest margin (NIM) for the first quarter of fiscal year 2024 was 4.10%, marking a 50 basis points increase compared to the previous year.
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