Profitability Metrics Inches Up

When it comes to commercial banks, brokerages are turning bullish on the expectation of strong earnings growth for the last quarter (Q) of Financial Year (FY) 2019. Axis bank is one such bank, which witnessed a positive turnaround in Q3 FY2019, boosting analyst confidence. Bank’s profit after tax (PAT) for Q3FY2019 witnessed a stellar growth of 131 per cent year-on-year (YoY) at Rs1,681 crores. Bank’s net interest margin (NIM) for Q3 was up by 3.47 per cent from 3.36 per cent in Q2. Bank’s increasing focus on the retail and small and medium enterprises segment has boosted the margins. “Going ahead, recoveries on stressed assets, hike in Marginal Cost of Funds based on Lending Rate and changes in the product mix is likely to provide support to margins to remain at the current level,” noted an analyst at ICICI Direct. Presently bank’s current account...