Axis Bank Posts Good Q2FY14 Results

Axis Bank announced its Q2FY14 financial results where it posted a bottomline of Rs 1362.31 crore as against Rs 1123.54 crore posted in Q2FY13 (September 2012). This rock solid performance for Q2FY14 after stellar results in Q1FY14 helped the bank to put in strong performance for the H1FY14 as well. Here the bottomline stood at Rs 2771.24 crore as against Rs 2277.06 crore.

If we take a look at the operational performance, for H1FY14 it posted a net interest income of Rs 5802 crore (Up by 29% on Y-o-Y basis).  On the quarterly basis, NII for Q2FY14 rose 26% YOY to Rs 2,937 crores from Rs 2,327 crores in Q2FY13. 

It is one of the few banks that have managed to show improvement in net interest margins. The Bank recorded a Net Interest Margin of 3.79% in Q2FY14 as against 3.46% in Q2FY13.

The Bank’s Balance Sheet grew 16% YOY and stood at Rs 3,51,363 crores as on 30th September 2013. The Bank’s Advances grew 17% YOY to Rs 2,01,303 crores as on 30th September 2013. Retail advances grew 37% YOY to Rs 60,869 crores as on 30th September 2013, and accounted for 30% of net advances of the Bank compared to 26% last year. SME segment too recorded a healthy growth of 29% YOY and stood at Rs 30,415 crores.

Despite Strong growth in advances the asset quality has been sustained. As on 30th September 2013, Gross NPAs and Net NPAs stood at 1.19% and 0.37%, as against 1.10% and 0.35% respectively as on 30th June 2013. The Bank held provision coverage of 80% as on 30th September 2013 (as a proportion of Gross NPAs including prudential write-offs). The provision coverage before accumulated write-offs was 89%. As on 30th September 2013, the Bank’s Gross NPA was Rs 2,734 crores as against Rs 2,490 crores as on 30th June 2013. During the quarter, the Bank added Rs 618 crores to Gross NPAs, recoveries and upgrades were Rs 266 crores and write-offs were Rs 107 crores.

The results have are better than the street estimates and we feel the stock is likely to move upwards in near term.