Key Takeaways:
- Axis Bank released its Q3 earnings report, with a 62% YOY increase in profits.
- However, Axis shares failed to respond to the traditionally bullish cue.
NEW DELHI (CoinChapter.com) — Indian private sector Axis Bank announced its earnings for Q3 2022, with better than estimated results. The bank reported a 62% Year-on-Year (YOY) increase in net profit, with its profit rising to INR 58.53 billion in Q3 2022.
The Net Interest Income (NII) for the quarter ending in December 2022 surged 32.4% to INR 114.59 billion, the private lender stated in its BSE filing. Axis Bank said that the Fee income grew 23% YOY in Q3 2022 to INR 41.01 billion.
Moreover, Axis Bank reported that the gross non-performing assets (GNPA) ratio as a percentage of total loans had declined to 2.38%, compared to 3.17% in Q3 2021. In addition, the net non-performing asset (NNPA) ratio declined to 0.47%.
Before write-offs, the bank stated net slippages in NPAs reached INR 17.19 billion in the quarter ending Dec. Furthermore, Axis Bank claimed it continued to maintain a strong presence in the digital payments sector, with 1.04 million credit cards acquired in Q3 2022.
The private lender also noted that its key subsidiaries registered strong performance in the third quarter of 2As a result, Axis Bank subsidiaries’ total annualized profits after tax (PAT) for the first nine months of FY 2022 grew 8% YOY to reach INR 12.52 billion.
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The capital adequacy ratio (CAR) also stood at 17.6% on Dec 31, with the bank claiming it was “well capitalized with a self-sustaining capital structure.“
Interestingly, Axis Bank reported impressive Q3 results despite rising provisions. The bank reported it had made INR 14.38 billion in provisions and contingencies, an 8% YoY increase. Moreover, Axis Bank stated it had not utilized Covid provisions during the quarter.
Axis Share Price Falls Despite Q3 Report
Despite a good Q3 earnings report, Axis Bank shares continued their bearish trend that began on Jan 3. Axis share price dropped 3.4% to form a low of INR 903.75 on Jan 24. The private lender’s stock price has fallen 6.8% from Jan’s high of INR 970.
Moreover, the relative strength index for Axis Bank shares, currently neutral at 41.96, has been forming lower highs. The RSI movement seems to indicate declining bullish momentum for AXISBANK price movement.
If AXISBANK price declines, Axis shares might reach support near INR 900. Furthermore, breaching below the immediate support level might force Axis Bank’s share price to drop 4.2% from current levels and reach support from its 100-day EMA (blue wave) near INR 872.4 before recovering.
However, the positive Q3 earnings report might act as a bullish cue for AXISBANK price. As a result, buyers might enter the market, helping Axis Bank’s stock price rise to resistance from its 20-day EMA (red wave) near INR 928.
A breach and hold above immediate resistance might prep AXISBANK price to target resistance near INR 947 before downside corrections pare gains.
