InvestorQ : How did Axis Bank report such a huge fall in profits in the March quarter? What does that say about the future of the stock?
Dia Deshpande made post

How did Axis Bank report such a huge fall in profits in the March quarter? What does that say about the future of the stock?

Answer
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Ria Jain answered.
6 months ago


Clearly, there have been huge slippages in the Axis Bank March quarter results and that is not too surprising. It reported a pre-tax loss of Rs.1878 crore for the March quarter due to a sharp spike in provisioning. During the quarter, Axis Bank recognized additional slippages of Rs.3920 crore and made additional provisions of Rs.1700 crore for further slippages in the future. The net interest income (NII) for the March quarter was up by 19% at Rs.6808 crore. The net interest margin (NIM) was marginally higher at 3.55%. The real culprit was the sharp spike in provisions from Rs.2711 crore to Rs.7730 crore on a YOY basis. But the bigger worry is that the bank is planning to raise Rs.35,000 crore this year and if the asset quality is not managed properly then it could become a real challenge for the bank.