Axis Bank Q1 Results: Net Profit Jumps 22.5% to Rs 7,114 Crore, Asset Quality Remains Stable

Axis Bank Ltd, India's third-largest private sector lender, reported a 22.5% rise in first-quarter net profit, beating street expectations as a decline in bad loan provisions offset rising funding costs and minor margin pressures.

The bank posted a standalone net profit of Rs 7,114 crore ($850 million) for the three months ended June 30, 2026, up from Rs 5,806 crore in the same period last year. The performance comfortably cleared consensus brokerage estimates from Nomura and Kotak Institutional.

Core Income & Margin Pressures

Core Net Interest Income (NII), the difference between interest earned on loans and interest paid on deposits, grew 8% year-on-year to Rs 14,646 crore. Interest earned rose 9.4% to Rs 33,985.63 crore, though a faster 10.5% spike in interest expenses limited aggressive core income expansion due to high competitive pressure on deposits.

The bank's Net Interest Margin (NIM) for the quarter came in at 3.46%. Net worth expanded 14% year-on-year to Rs 2.03 lakh crore, while its overall Return on Average Assets (RoA) improved to 1.51% against 1.47% in the year-ago period.

A big relief to the bottom line came via a 43.7% drop in provisions and contingencies, which fell to Rs 2,223 crore from Rs 3,947.66 crore in Q1 of the previous fiscal year. Specific loan loss provisions for the quarter stood at Rs 2,079 crore.

The bank also chose not to draw down on its pre-existing precautionary West Asia crisis portfolio provision buffer, keeping the structural safety vault intact at Rs 2,001 crore.

Asset Quality and Balance Sheet 

Asset quality parameters remained range-bound. The Gross Non-Performing Asset (GNPA) ratio improved year-on-year to 1.28% from 1.54%, though it registered a marginal sequential tick-up from 1.23% in the preceding March quarter. The Net NPA ratio stood stable at 0.39%.

Advances momentum tracked ahead of general banking industry standards, driven by a stable Current Account Savings Account (CASA) footprint of Rs 5.22 lakh crore.

Ahead of the earnings release, Axis Bank shares closed 2% higher at Rs 1,329.40 on the National Stock Exchange on Friday. 

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