Axis Bank Reports Q2 Net Profit of ₹7,003 Crore, Below Estimates
In its second quarter results, Axis Bank's net profit rose by 37.6% year-on-year but fell short of market expectations.
Axis Bank's net profit for Q2 FY27 reached ₹7,003 crore, missing analyst predictions.
Net interest income (NII) increased by 11.8% to ₹15,371 crore, surpassing estimates.
Asset quality improved with a decline in gross non-performing assets (GNPA) ratio to 1.16%.
Axis Bank announced a net profit of ₹7,003.3 crore for the second quarter of FY27, marking a 37.6% increase compared to the same period last year. However, this figure was approximately 1.8% lower than the analysts' expectations of ₹7,132 crore, as reported in a CNBC TV18 poll. The bank's net interest income (NII) also showed a positive trend, rising 11.8% to ₹15,371.4 crore, exceeding the forecast of ₹14,970 crore by around 2.7%.
The bank's performance was characterized by a net interest margin (NIM) of 3.36% for the July-September quarter, which improved to 3.47% when excluding the effects of foreign currency non-resident deposits. Axis Bank raised ₹1,018 billion under the FCNR (B) scheme, which included significant contributions from its international branches. Operating profit rose by 6% year-on-year to ₹11,083 crore, while core operating profit increased by 11% to ₹10,998 crore.
In terms of asset quality, Axis Bank reported a decline in the gross non-performing assets (GNPA) ratio to 1.16%, down from 1.46% a year earlier. The net NPA ratio also improved, falling to 0.35% from 0.44% in the previous year. The bank's provisions for the quarter totaled ₹1,694 crore, which included specific loan-loss provisions of ₹1,564 crore. Additionally, gross slippages decreased to ₹4,762 crore from ₹5,566 crore in the preceding quarter.
The bank's advances increased by 23% year-on-year to ₹13.74 lakh crore, with retail loans growing by 16% to ₹7.40 lakh crore, making up 54% of total advances. Total deposits rose by 21% year-on-year to ₹14.52 lakh crore, with term deposits increasing by 27%. The bank's capital adequacy ratio stood at 16.27%, with a common equity tier-1 (CET-1) ratio of 14.61%.
Looking ahead, Axis Bank continues to focus on enhancing its digital payment solutions and leveraging AI-driven innovations to improve customer service. The bank's shares closed at ₹1,290, reflecting a slight increase ahead of the earnings announcement, and it has shown resilience in a challenging market, outperforming the Nifty 50 index this year.
