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Axis Bank – Result Analysis

July 15, 2008

Axis Bank’s results were ahead of expectations. Axis Bank reported a bottom line of Rs330.1 crore for Q1FY2009. The same grew by a whopping 88.6% on a year-on-year (y-o-y) basis.The net interest income (NII) for the quarter came in at Rs810.5 crore, up 81.4% year on year (yoy). The non-interest income too recorded a strong growth of 82.5% yoy and reached Rs624.8 crore. This was on the back of a robust growth in the fee income (up 80%) and the forex income. treasury income (excluding customer forex earnings) registered a decline of 17.7%.

Axis’ pre-provisioning profits are up 118% YoY on a mix of accelerating 80%+ fee income growth (broad-based), some cost control, and 90% NII growth (boost by capital, margins fall). Market expectations of Axis’ asset risks have been modest. This quarter does not provide the answers. Overall, asset quality is better than expected and remains on the ‘keenly watch’, rather than worry, list.

Analysts expect Axis to report a full year EPS of Rs 37.75 to Rs 38.50.

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