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Axis Bank: Cleaning up books - Views on News from Equitymaster
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Axis Bank: Cleaning up books
Nov 2, 2015

Axis Bank declared the results for the second quarter of financial year ended March 2016 (2QFY16). The bank has reported 15.2% YoY and 18.9% YoY growth in net interest income and net profits respectively in 2QFY16. Here is our analysis of the results.

Performance summary

  • Net interest income grows by 18.8% YoY during 1HFY16 on the back of 23% YoY growth in advances.
  • Net interest margins (NIM) come down marginally from 3.9% in 1HFY15 to 3.8% in 1HFY16. The average NIM over the past 6 fiscals has been above 3.3%.
  • Net profits grow by 18.8% YoY in 1HFY16 backed by growth in fee income.
  • Both the gross (1.3%) and net NPA (0.5%) levels remained at the same ratio as they were in September 2014. However this was on the back of sale of non-recoverable assets to the tune of Rs 6.5 bn to asset reconstruction companies.
  • Capital adequacy ratio (CAR) on a firm footing at 15.4% at the end of September 2015 as per Basel III norms (Tier 1 capital at 12.2%).
Rs (m) 2QFY15 2QFY16 Change 1HFY15 1HFY16 Change
Interest income 86,023 99,596 15.8% 168,917 198,957 17.8%
Interest expense 50,775 58,975 16.1% 100,564 117,774 17.1%
Net Interest Income 35,248 40,621 15.2% 68,353 81,183 18.8%
Net interest margin (%)       3.9% 3.8%  
Other Income 19,476 20,414 4.8% 36,386 43,396 19.3%
Other Expense 23,101 24,755 7.2% 44,160 47,379 7.3%
Provisions and contingencies 7,250 7,071 -2.5% 11,116 18,289 64.5%
Profit before tax 31,623 36,280 14.7% 60,579 77,200 27.4%
Tax 8,265 10,051 21.6% 16,688 19,970 19.7%
Profit after tax/ (loss) 16,108 19,158 18.9% 32,775 38,941 18.8%
Net profit margin (%) 18.7% 19.2%   19.4% 19.6%  
No. of shares (m)*     2,277.5  
Book value per share (Rs)         205.6  
P/BV (x)*         2.3  

*Book value as on 30th September 2015

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