Axis Bank has unveiled its financial performance for the January-March quarter of fiscal 2023-24 (Q4FY24), showcasing a significant turnaround from the previous year. The bank recorded a net profit of ₹7,130 crore for the current period, a substantial improvement from the loss of ₹5,728 crore in the same period last year, demonstrating its strong growth and resilience.
Let us understand the critical highlights of Axis Bank’s Q4FY24 scorecard and explore the various facets of its performance:
Financial Performance
Axis Bank’s operating profit surged by 15% year-on-year (YoY) to ₹10,536 crore, reflecting a steady upward trajectory. The core operating profit for the quarter reached ₹9,515 crore, marking a 5% YoY increase. Notably, the net profit for Q4FY24 stood at ₹7,130 crore, substantially improving from the net loss of ₹5,728 crore in Q4FY23. It represents a remarkable 17% quarter-on-quarter (QoQ) growth.
The bank reported a robust net interest income (NII) of ₹13,089 crore, marking an 11.5% year-on-year (YoY) increase. The bank’s net interest margin (NIM) for Q4FY24 stood at 4%, registering a five basis points (bps) QoQ expansion.
Axis Bank witnessed notable growth in Other Income, with fee income for Q4FY24 increasing by 23% YoY and 9% QoQ to ₹5,637 crores. Retail fees constituted a significant portion of the bank’s total fee income, growing by 33% YoY and 12% QoQ. Furthermore, fees from third-party products witnessed a remarkable surge of 59% YoY, underscoring the bank’s diversified revenue streams.
Market Response
After announcing its Q4FY24 results, Axis Bank’s share price experienced a significant surge, closing at ₹1127.35 apiece on the BSE on April 25. This positive market response clearly indicates investor confidence in the bank’s performance. Notably, over the past year up to April 25, 2024, Axis Bank’s share price has surged by approximately 28% outperforming both the BSE Bankex index (14%) and the benchmark index Sensex (24%).
Asset Quality
As of March 31, 2024, Axis Bank exhibited robust asset quality, with reported gross non-performing assets (NPA) and net NPA levels at 1.43% and 0.31%, respectively. These figures reflect an improvement from the previous quarter, showcasing the bank’s proactive management of its asset quality. Noteworthy are the recoveries from written-off accounts amounting to ₹919 crore during the quarter, indicating effective risk management practices.
Provisions and Contingencies
The bank maintained a healthy provision coverage ratio (PCR) of 79%, albeit slightly lower than the year-ago period. Provision and contingencies for Q4FY24 stood at ₹1,185 crore, with specific loan loss provisions amounting to ₹832 crore. Remarkably, the bank refrained from utilizing Covid provisions during the quarter, reclassifying them to other provisions. With cumulative provisions of ₹12,134 crore at the end of Q4FY24, Axis Bank remains well-prepared to mitigate potential risks.
Dividend
The bank’s board has proposed a dividend of Re 1 per equity share for the fiscal year 2023-24. This proposal, subject to shareholder approval at the upcoming annual general meeting, underscores the bank’s commitment to delivering value to its shareholders. This commitment should make shareholders feel valued and appreciated for their investment in Axis Bank.
Brokerage Firms’ Recommendations
Several brokerage firms are optimistic about Axis Bank’s Q4FY24 performance. Nirmal Bang and Prabhudas Lilladher maintained a buy call, with revised target prices of ₹1,255 and ₹1,400, respectively. JM Financial and Choice Equity Broking also recommended a buy call with target prices of ₹1,330 and ₹1,325. However, Motilal Oswal Financial Services retained a ‘neutral’ view with a revised target price of ₹1,200, emphasizing the importance of monitoring costs and the high CD ratio.
Summary
Axis Bank’s Q4FY24 performance underscores its resilience, prudent risk management, and focus on driving sustainable growth. The bank’s robust asset quality, healthy profitability, and diversified revenue streams enable it to confidently steer the altering market dynamics and consistently deliver long-term value to its stakeholders. Axis Bank remains a strong contender in the Indian banking sector as it pursues strategic goals and takes advantage of new opportunities.
Disclaimer: We do not endorse or encourage you to take trades or investment decisions based upon our posts/research, all of your trading and investment activities are your own and should be taken through consultation with reputed financial advisors. The analysis posted on this website has been created by involving multiple mediums which are present over the Internet.