Axis Bank Q2 Profit Jumps 38% to ₹7,003 Crore as Provisions Halve

Axis Bank’s net profit rose 38% year-on-year to ₹7,003 crore in the September quarter of FY27, helped by a sharp fall in provisions, the private sector lender said on Saturday, 17 October. It had reported a profit of ₹5,089 crore in the same quarter last year. Consolidated net profit stood at ₹7,704.67 crore.

Net interest income (NII) grew 12% to ₹15,371 crore. Net interest margin narrowed to 3.36% from 3.73% a year earlier; excluding the impact of FCNR-B deposits, it stood at 3.47%. Operating profit rose 6% to ₹11,083 crore, while core operating profit grew 11% to ₹10,998 crore.

Provisions and contingencies fell 52% to ₹1,694 crore, and annualised credit cost eased to 0.45%. Other income slipped 1% to ₹6,531 crore as trading income dropped to ₹85 crore from ₹498 crore, though fee income rose 6% to ₹6,381 crore.

Asset quality improves, loans grow 23%

The gross NPA ratio improved to 1.16% from 1.28% in the June quarter, and the net NPA ratio declined to 0.35% from 0.39%. Gross slippages came in at ₹4,762 crore, against ₹5,696 crore a year ago and ₹5,566 crore in the previous quarter. The provision coverage ratio stood at 70%.

Advances rose 23% year-on-year and 9% sequentially to ₹13.74 lakh crore. Corporate loans grew 34% to ₹4.69 lakh crore and SME loans 25% to ₹1.65 lakh crore, while retail loans rose 16% to ₹7.4 lakh crore, making up 54% of net advances.

Deposits increased 21% to ₹14.52 lakh crore, led by 27% growth in term deposits. Current account deposits rose 7% and savings deposits 12%, pulling the CASA ratio down to 36% from 40% a year earlier. FCNR-B deposits stood at ₹1.018 lakh crore. The capital adequacy ratio was 16.27%, with a CET-1 ratio of 14.61%.

For the first half of FY27, net profit rose 30% to ₹14,117 crore, and NII grew 10% to ₹30,018 crore.

Management view

Executive Director Subrat Mohanty said the bank had “multiple levers” on both cost of funds and asset mix, and had not yet revised retail term deposit rates. He added that the insurance regulator’s proposal on distribution reform was still a consultation paper and that the bank had ways to offset any impact on fee income.

Managing Director and CEO Amitabh Chaudhry said the bank remained focused on combining innovation, trust and execution, and had advanced its AI-led technology agenda during the quarter.

The board appointed Ananth Narayan, former whole-time member of SEBI, as an additional independent director effective 19 October. Rahul Shukla was named Group Head, Commercial and Bharat Banking.

Axis Bank’s profit growth outpaced HDFC Bank’s 4.7% and ICICI Bank’s 20.1% in the same quarter. Its shares closed 0.16% higher at ₹1,290 on the NSE on 16 October, ahead of the results.

Investors will watch the margin trajectory in the second half of FY27, the bank’s use of FCNR-B funds, and whether lower credit costs can be sustained as loan growth stays above 20%.