Axis Bank Q3-FY24 Result Analysis

Earnings Snapshot

Analysis

Interest Earned

• Q3-FY24 vs. Q2-FY24 (Q-o-Q): Interest earned increased by 5.3%, indicating growth in the bank's interest income during the quarter.
• Q3-FY24 vs. Q3-FY23 (Y-o-Y): The substantial 26.4% increase in interest earned reflects robust year-over-year peformance, suggesting improved lending or investment activities.
• 9M-FY24 vs. 9M-FY23 (Y-o-Y): The 31.4% growth in interest earned over the nine-month period is noteworthy, contributing to overall revenue.

Operating Profit 

• Q3-FY24 vs. Q2-FY24 (Q-o-Q): Operating profit remained relatively stable with a marginal 0.1% increase. Further analysis of cost components would be necessary to understand the drivers.
• Q3-FY24 vs. Q3-FY23 (Y-o-Y): The significant 24.9% decrease in operating profit warrants investigation into factors impacting operational efficiency or costs.
• 9M-FY24 vs. 9M-FY23 (Y-o-Y): The 5.9% decline in the nine-month operating profit may suggest challenges or adjustments in the bank's operational performance.

Operating Profit Margin   

• Q3-FY24 vs. Q2-FY24 (Q-o-Q): The 60 bps decrease in the margin indicates a slight reduction in profitability relative to the previous quarter.
• Q3-FY24 vs. Q3-FY23 (Y-o-Y): The substantial 820 bps drop year-over-year requires careful examination, highlighting potential efficiency or cost structure issues.
• 9M-FY24 vs. 9M-FY23 (Y-o-Y): The 200 bps reduction in the nine-month period suggests a persistent challenge in maintaining historical profitability levels.

Net Profit

• Q3-FY24 vs. Q2-FY24 (Q-o-Q): Net profit increased significantly by 50%, indicating improved bottom-line performance during the quarter.
• Q3-FY24 vs. Q3-FY23 (Y-o-Y): The impressive 59% growth in net profit reflects a strong year-over-year financial outcome.
• 9M-FY24 vs. 9M-FY23 (Y-o-Y): The 15.9% increase in the nine-month net profit suggests positive overall financial performance.

Net Profit Margin

• Q3-FY24 vs. Q2-FY24 (Q-o-Q): Despite a 108 bps decrease, the net profit margin remains healthy at 22.5%, indicating efficient cost management.
• Q3-FY24 vs. Q3-FY23 (Y-o-Y): The 161 bps drop in net profit margin suggests potential challenges in maintaining profitability amid changing market conditions.
 • 9M-FY24 vs. 9M-FY23 (Y-o-Y): The 300 bps reduction in the nine-month period warrants attention and analysis of factors affecting overall profitability.

Earnings Per Share (EPS)

• Q3-FY24 vs. Q2-FY24 (Q-o-Q): Both basic and diluted EPS show a 4.6% increase, indicating improved earnings attributable to each share.
• Q3-FY24 vs. Q3-FY23 (Y-o-Y): The 4.6% and 5.3% growth in basic and diluted EPS, respectively, demonstrate enhanced earnings per share over the year.
• 9M-FY24 vs. 9M-FY23 (Y-o-Y): The 15.8% and 15.4% rise in basic and diluted EPS for the nine-month period reflects sustained earnings growth.

In summary, while Axis Bank has demonstrated strong growth in certain areas, the decline in operating profit and margin requires careful scrutiny. Further investigation into the cost structure and operational efficiency is recommended to gain a comprehensive understanding of the bank's financial performance.