Axis Bank Q1 net seen down 2%, credit cost may impact earnings

Private sector lender Axis Bank's first quarter (April-June) earnings are expected to be muted due to high credit cost. Profit is seen falling 2.3 percent to Rs 1,933.4 crore on yearly basis, according to average of estimates of analysts polled by CNBC-TV18. The private sector lender will announce its earnings on July 22.

Net interest income, the difference between interest earned and interest expended, is likely to increase 13 percent to Rs 4,582.4 crore from Rs 4,056.2 crore in same period.

Key things to watch out for would be asset quality movement, slippages from watchlist and net interest margin.

Analysts say if gross non-performing assets in Q1FY17 come below 2 percent (against 1.67 percent in Q4FY16) and net interest margin above 3.85 percent (against 3.97 percent in Q4) then that will be positive.Ravikant Bhat of IDBI Capital, in an interview to CNBC-TV18, said: "Worsening of asset quality and elevated levels of slippages as indicated in the Watchlist is going to be the cause of concern."