The private sector lender is projected to report a significant 65% YoY growth in net profit for the June quarter at Rs 3,413.4 crore. Analysts observe that net interest income may increase by 35% YoY to Rs 6,337 crore. The bank is set to announce its first-quarter earnings on Saturday.
Sequentially, the net profit is estimated to decline by 2.4%, while net interest income may rise by about 4%. Year-to-date, the bank’s shares have gained nearly 8%, but have underperformed Nifty50 by about 3%.
Here is a summary of analysts’ expectations on earnings from the lender:
Motilal Oswal Securities
Expect steady traction in loan and deposit growth. Liability growth will likely remain healthy; margins will moderate to 5.6%. The unsecured loan mix will hopefully maintain an uptrend. Slippages and credit cost are expected to remain under control.
PhillipCapital
Loan growth is expected to witness sequential growth, driven by mortgage and unsecured loans. Credit cost should move towards normalization. The rising cost of funds will put pressure on margins.
Nuvama Institutional Equities
Expect a 4% QoQ loan growth. Kotak’s NIM may decline by 12 bps QoQ, lower than the decline for ICICI Bank, due to the improving loan mix. From Q2, however, the decline in NIM could accelerate due to the newly launched sweep deposit scheme.
Axis Securities
Credit/deposit growth momentum is expected to remain healthy; unsecured loans will increase in the overall portfolio mix. Margin pressures will arise with the rising cost of funds. Cost ratios are expected to remain stable, supporting PPoP growth.
Benign credit costs will aid in earnings growth; asset quality is expected to remain steady. The key monitorables will be commentary on interest margins and growth outlook.
(Disclaimer: Recommendations, suggestions, views, and opinions given by the experts are their own. These do not represent the views of Economic Times)