Axis Bank Posts Flat Q4 Net Profit, Beats Estimates Amid Improved Asset Quality

Axis Bank Reports Slightly Above-Expectation Q4 FY26 Earnings

Axis Bank, a private sector lender, reported its March quarter (Q4 FY26) earnings on Saturday, with a net profit of Rs 7,071 crore. This result marginally exceeded the CNBC-TV18 poll estimate of Rs 6,989 crore, but declined 0.6 percent year-on-year from Rs 7,117 crore.

Despite the decline, the bank's net interest income (NII) rose 5 percent on-year to Rs 14,457 crore, driven by a 3.62 percent net interest margin for the quarter. Axis Bank's provisions and contingencies, however, rose sharply to Rs 3,522 crore during the fiscal fourth quarter, compared with Rs 2,245 crore in the previous quarter, and Rs 1,359 crore a year ago.

The bank created an additional one-time provision of Rs 2,001 crore to strengthen its balance sheet amid "evolving and unpredictable macroeconomic and geopolitical uncertainties." This move was precautionary and does not reflect any deterioration in asset quality. Axis Bank's asset quality metrics improved sequentially, with a gross non-performing assets (GNPA) ratio declining to 1.23 percent from 1.40 percent in the previous quarter.

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Key Performance Indicators

Core operating revenue remained broadly stable, while fee income grew 8 percent quarter-on-quarter and 4 percent year-on-year to Rs 6,561 crore, supported by retail fee growth and granular fee mix. However, overall non-interest income was impacted by a trading loss of Rs 606 crore during the quarter. Operating profit declined 7 percent year-on-year to Rs 10,013 crore, while operating expenses rose 6 percent on-year.

Axis Bank's advances grew 19 percent year-on-year and 6 percent sequentially to Rs 12.34 lakh crore, led by strong growth in corporate and SME segments. Deposits rose 14 percent on-year, with a cash and savings account (CASA) ratio at 40 percent. The bank maintained a strong capital position, with a capital adequacy ratio at 16.42 percent and a common equity tier-1 (CET-1) ratio at 14.38 percent.

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The bank continued to see strong traction in its digital and payments business, maintaining a leading position in the UPI payer PSP segment with around 36 percent market share. Axis Bank added over 1 million credit cards during the quarter and reported strong growth in digital transactions.

The board has recommended a dividend of Re 1 per equity share for FY26, subject to shareholder approval. Axis Bank shares had closed at Rs 1,362 on Friday, down 0.55 percent for the day, while the stock is up 16.8 percent over the past one year.