HDFC Securities expects around 10 percent YoY loan growth and a marginal improvement in NIMs to drive core earnings (NII) growth of 16 percent YoY.
Private sector lender Axis Bank is
expected to report a profit in the range of Rs 1,400-2,000 crore during Q2FY21
against a loss of Rs 112.1 crore in the year-ago quarter. The lender is also
likely to report a sharp sequential growth in profit to lower provisions.
Net interest income (NII), the difference
between the interest income from lending activities and the interest paid to
depositor, is seen rising more than 15 percent year-on-year with 10 percent
loan growth and 11 percent growth in deposits compared to the year-ago period,
while pre-provision operating profit may grow in the 6-8 percent range YoY.
"We expect loan growth at 10 percent YoY with
a greater focus on retail. We expect operating profit to grow at 8 percent YoY
led by better cost controls," said Kotak Institutional Equities, which
sees profit at Rs 1,982 crore and 17.5 percent growth in NII.
HDFC Securities sees around 10 percent YoY loan
growth and a marginal improvement in NIMs are expected to drive core earnings
(NII) growth of 16 percent YoY.
Asset quality is expected to be largely stable on a
sequential basis with the focus on the quantum of loan restructuring but credit
cost may stay higher.
"We expect slippages of around Rs 2,500 crore
(around 2 percent of loans) subject to a court ruling. We expect gross NPL to
remain flat QoQ. The focus would be on the expected quantum of restructured
loans by Q4FY21 and update on the loan book as the moratorium is lifted,"
Kotak said.
KR Choksey expects the credit costs to remain
elevated and the focus to remain on restructuring.
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