Axis Bank Q1 PAT seen up 18% to Rs 1,112 cr

Net interest income is seen going up by 24% year-on-year to Rs 2,139 crore in the first quarter of FY13.

Analysts on average feel the growth in net interest income of the bank will sustain like previous quarters while profit after tax is expected to be pressured due to higher provisioning. In the March quarter, the bank had reported a growth of 26% in net interest income and 25% in profit after tax.

Provisions are expected to be higher QoQ due to higher slippages and last quarter's low provisions were a one off. In fourth quarter of FY12, the bank had made provisions of Rs 139.2 crore, down 45% QoQ.

Net interest margin is expected to be under pressure due to higher cost of funds. In Q4, net interest margin had declined by 20 basis points QoQ to 3.55% due to a higher cost of funds at 6.45% and ramping up of priority sector disbursements.

The bank had forecasted net interest margin in the range of 3.25%-3.5% for the current financial year 2012-13.

Loan book is likely to grow 20%+ led by retail segment.

News reports indicated that Max India renegotiated an existing equity arrangement with Axis Bank on repurchasing Axis's 4% stake in Max New York Life Insurance. Out of this 4%, a maximum of 1% was expected to be bought in Q1 and could be reflected in trading gains (around Rs 80 crore).