Axis Bank's Q3 Results Show Positive Growth, But Concerns Remain

Axis Bank, one of the leading private banks in India, has recently announced its financial results for the quarter ending December 2023. The bank has shown a positive performance in this quarter, with its score improving from 11 to 9 in the last 3 months.

One of the key highlights of the financials is the bank's Gross NPA (Non-Performing Assets) which has decreased to 1.58%, the lowest in the last five quarters. This shows that the proportion of stressed loans given by the bank is decreasing. Additionally, the Net Interest Income has also seen a significant growth, reaching Rs 12,532.15 crore and growing each quarter in the last five quarters. This indicates that the bank's core business is performing well.

Another positive aspect is the Interest Earned, which has reached its highest at Rs 27,961.14 crore and has grown at 25.80% Year on Year (YoY). This shows a positive trend in the bank's near term sales. The Profit After Tax (PAT) has also seen a significant increase, reaching its highest at Rs 6,071.10 crore in the last five quarters. This indicates a positive trend in the bank's near term PAT.

On the other hand, the Profit Before Tax (PBT) has fallen at -21.72% YoY, which is a cause for concern. The Operating Profit (PBDIT) has also decreased each quarter in the last five quarters, indicating a negative trend in the near term. The Operating Profit Margin has also fallen to its lowest at 12.83%, showing a deterioration in the company's efficiency.

One area of concern is the Non Operating Income, which is 68.47% of the Profit Before Tax (PBT). This indicates that the bank's income from non-business activities is high, which may not be a sustainable business model. The CAR (Capital Adequacy Ratio) has also decreased to its lowest at 14.88%, showing a deterioration in the bank's capital base compared to its risk assets.

Overall, Axis Bank has shown a positive financial performance in the quarter ending December 2023. With its Gross NPA and Net Interest Income improving, the bank is on a path of growth. However, the decrease in PBT and Operating Profit is a cause for concern and the bank will need to address these issues to maintain its positive trend. MarketsMOJO has given a 'Strong Buy' call for the stock, indicating a positive outlook for the bank's future.