PL First Cut - Axis Bank Q2FY24

PL First Cut – Axis Bank Q2FY24 – Gaurav Jani – Research Analyst, Prabhudas Lilladher Pvt Ltd

Axis Bank Q2FY24 – Core PPoP beat by 8.2% led by higher core revenue partly offset by higher opex; provisions were lower

--NII was ahead at Rs123.1bn (PLe Rs116bn) as NIM was better while loan growth was slightly higher.

--NIM (calc.) was a beat at 4.19% (PLe 3.95%) mainly led by lower CoF and higher LDR

--Loan growth was higher than expected at 22.7% YoY (PLe 21% YoY) while deposit growth was lower at 17.9% YoY (PLe 21%)

--Loan growth of 4.5% QoQ split: SME (9.5%), while retail and corporate clocked a growth of 4.4%/3.2%.

--Deposits accretion was: CASA de-grew by 1.2% QoQ while TD grew by 3.7%. Retail TD saw higher growth of 4.25% QoQ/15.3% YoY.

--Other income was in-line at Rs50.3bn; while fees were higher.

--Opex was 3.9% miss to PLe at Rs87.2bn due to higher other opex, while staff cost was lower.

--PPoP was a beat at Rs86.3bn (PLe Rs82.7bn) while core PPoP was 8.2% higher to PLe.

--Asset quality was stable; GNPA/NNPA declined QoQ to 1.78%/0.37% while PCR was steady QoQ at 80%.

--Gross slippages were lower at Rs32.54bn (PLe Rs37.7bn), while recoveries at Rs19.8bn (PLe Rs22bn). Write-offs were higher at Rs26.7bn (Rs15bn)

--Provisions were lower at Rs8.14bn (PLe Rs12.0bn)

-- PAT was Rs58.6bn (PLe Rs53bn) while core PAT at Rs59.4bn was 15.2% higher to PLe

--The stock trades at P/ABV of 1.8x/1.5x on FY25E ABV