Axis Bank is anticipated to present a subdued financial performance in the third quarter of the fiscal year, marked by a modest increase in net interest income (NII) and marginal profit growth.

Analysts forecast a year-on-year decline in net profit by 4.1%, reaching Rs 5,611 crore, accompanied by a 7.4% YoY rise in NII to Rs 12,311 crore, as projected by Prabhudas Lilladher. The provision is expected to escalate by 35% sequentially, reaching Rs 1,100 crore. Gross non-performing assets (NPA) percentage is anticipated to decrease to 1.71%, down by 6 basis points from September's 1.78%. Net interest margin (NIM) is foreseen at 4.05%, reflecting a 17 basis points YoY decline and a 14 basis points quarter-on-quarter decrease. Credit cost is projected to rise by 0.47%, marking an 11 basis points sequential increase.

Motilal Oswal, on the other hand, envisions a 3.9% YoY increase in profit, totaling Rs 6,082.20 crore, with NII growing by 10.9% YoY to Rs 12,710 crore. The brokerage anticipates provisions to reach Rs 950 crore, and while credit costs are expected to slightly rise, cost ratios are foreseen to remain elevated. Despite the challenges, Motilal Oswal expresses confidence in the overall health of the bank's business growth.

KRChoksey Shares and Securities highlight an expected 22.5% YoY surge in advances, primarily driven by the retail segment, and a sequential growth of approximately 4.1%. Deposits are projected to witness an 18% YoY increase and a 4.8% sequential rise. The CASA ratio is anticipated to be around 40.6% as of December 31, 2023, compared to 41.3% in the previous quarter. NIMs are likely to decline by 13 basis points quarter-on-quarter in Q3FY24E, while the cost-to-income ratio is expected to improve to 49.6%, down from 50.2% in Q2FY24.

Despite higher operating expenses, the analysts expect profit after tax (PAT) to grow by 3.9% YoY and 3.7% QoQ, driven by lower credit costs, especially on a YoY basis. As investors await the official results, Axis Bank's shares experienced a 2.84% decline, trading at Rs 1,088.95, with a flat year-to-date performance.