Axis Bank’s stock price exhibited flat trading during Wednesday’s session, in anticipation of its Q2 results covering the period ending on September 30, 2023. The stock opened today at ₹963.45 per share on the BSE. At 9:30 IST, Axis Bank shares had risen marginally by 0.34% to ₹966.70 per share.

According to Rajesh Bhosale, an Equity Technical and Derivative Analyst at Angel One, the Axis Bank stock has recently experienced a notable correction. He noted that the daily chart indicates the formation of a “Lower Top Lower Bottom” pattern. In the near term, further correction may occur, with immediate support expected around ₹940, and any potential rebound might encounter resistance near the ₹1,000 level.

Analysts estimate that the private sector lender will report respectable profit growth along with increased net interest income in line with street projections. Nevertheless, margins are anticipated to continue facing pressure, aligning with a broader trend observed across the banking industry.

During Q2FY24, the banking industry recorded robust credit growth at 15% YoY, primarily driven by unsecured loans and a modest improvement in corporate credit. The RBI’s slight demonetization of ₹2,000 notes and the higher interest rates on term deposits offered by banks have contributed to a 13% YoY growth in deposits. This, along with an acceleration in CASA cannibalization, is expected to support funding costs.

In the quarter concluding in September 2023, Axis Bank is predicted to witness a 12% YoY increase in net profit, reaching ₹5,970 crore, compared to ₹5,329.8 crore reported during the corresponding quarter of the previous year.

The bank’s net interest income (NII) for Q2FY24 is likely to register a 15% growth, rising to ₹11,914 crore from ₹10,360.3 crore YoY. Nevertheless, the net interest margin (NIM) is anticipated to experience a minor sequential decline due to higher cost of funds.

In the quarter ending June, Axis Bank reported a consolidated net profit of ₹5,797 crore, signifying a 41% increase from the ₹4,125 crore recorded during the corresponding quarter of the prior fiscal year. The bank’s net interest income (NII) also surged by 27% from ₹9,384 crore in Q1FY23 to ₹11,958 crore in the quarter concluding in June 2023. The net interest margin (NIM) for Q1FY24 stood at 4.10%, marking a 50 bps increase YoY.

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