Axis Bank shares soared on Wednesday to a fresh 52-week high after the lender reported a more than two-fold rise in net profits for the third quarter.
Shares rose more than 6 percent to Rs 703 as against the previous close of 660.80 on the Bombay Stock Exchange.
The bank reported on Tuesday that net profit hit Rs 1,680.85 crore in the quarter ended December 31, compared with a net profit of Rs 726 crore in the same quarter a year ago.
The bank has faced some headwinds, especially on the asset quality front, driven by corporate slippages. Financial performance, too, has moderated and corporate loans have grown below our long-term growth rates. An increase in our operational risks has not helped the cause either.
The Q3 net was the bank's highest profit in the last 11 quarters. The bank said net interest income rose 18 percent to Rs 5,604 crore, which is the highest in the last 10 quarters.
Total income in the third quarter increased to Rs 18,130.42 crore as against Rs 14,314.63 crore in the year-ago period. "Net interest margin for the third quarter this fiscal was 3.47 per cent, up from 3.36 per cent in the second quarter, a statement said.
Axis Bank MD and CEO Amitabh Chaudhry, who took over the reins from long-serving CMD Shikha Sharma, said the bank's focus will be on growth, profitability and sustainability over the next three years.
"The bank has faced some headwinds, especially on the asset quality front, driven by corporate slippages. Financial performance, too, has moderated and corporate loans have grown below our long-term growth rates. An increase in our operational risks has not helped the cause either," he said.
'Goal is 18 percent RoE
Axis Bank said net non-performing assets (NPAs) were at 2.36 percent of the net advances as on December 31, 2018. It said it made a big leap in terms of recovering bad debts. It said it recovered Rs 998 crore during the third quarter, compared with Rs 40 crore in the same period a year ago.
Axis Bank stock has risen as much as 15 percent during the last one year, while the gain this year alone was 11 percent.
"Our goal is to deliver 18 per cent Return on Equity sustainably," CEO Amitabh Chaudhry said. "While delivery of growth and profitability is really important, we intend to focus just as much on the sustainability of our efforts and outcomes," Chowdhry told ET.