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Axis Bank: Pickup in credit demand - Views on News from Equitymaster
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Axis Bank: Pickup in credit demand
Feb 6, 2016

Axis Bank declared the results for the third quarter of financial year ended March 2016 (3QFY16). The bank has reported 15.9% YoY and 14.5% YoY growth in net interest income and net profits respectively in 3QFY16. Here is our analysis of the results.

Performance summary

  • Net interest income grows by 17.8% YoY during 9mFY16 on the back of 21% YoY growth in advances.
  • Net interest margins (NIM) come down marginally from 3.9% in 9mFY15 to 3.8% in 9mFY16. The average NIM over the past 6 fiscals has been above 3.3%.
  • Net profits grow by 17.2% YoY in 9mFY16 backed by growth in fee income.
  • Both the gross (1.7%) and net NPA (0.75%) levels were higher than 1.3% and 0.4% levels respectively in December 2014.
  • Capital adequacy ratio (CAR) on a firm footing at 15.5% at the end of December 2015 as per Basel III norms (Tier 1 capital at 12.3%).
Rs (m) 3QFY15 3QFY16 Change 9mFY15 9mFY16 Change
Interest income 88,897 101,933 14.7% 257,815 300,890 16.7%
Interest expense 53,002 60,313 13.8% 153,566 178,087 16.0%
Net Interest Income 35,895 41,620 15.9% 104,249 122,803 17.8%
Net interest margin (%)       3.9% 3.8%  
Other Income 20,390 23,377 14.6% 56,777 66,774 17.6%
Other Expense 23,140 25,147 8.7% 67,300 72,527 7.8%
Provisions and contingencies 5,071 7,126 40.5% 16,187 25,415 57.0%
Profit before tax 33,145 39,850 20.2% 93,726 117,050 24.9%
Tax 9,076 10,971 20.9% 25,765 30,941 20.1%
Profit after tax/ (loss) 18,998 21,753 14.5% 51,774 60,694 17.2%
Net profit margin (%) 21.4% 21.3%   20.1% 20.2%  
No. of shares (m)*         2,178.0  
Book value per share (Rs)         215.0  
P/BV (x)*         1.9  

*Book value as on 30th December 2015

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