Whalesbook
Axis Bank Ltd. commenced 2026 with a mixed Q3 performance update, reporting robust growth in its loan book and deposit base while simultaneously revealing a significant contraction in net profit. For the quarter ending December 31, 2025, gross advances climbed 14.1% year-on-year to ₹11.71 lakh crore. Total deposits saw a parallel surge of 15% to ₹12.61 lakh crore over the same period.
Profitability Pressures Emerge
Despite healthy asset and liability growth, the private lender's net profit for the quarter plummeted by 26% compared to the previous year, settling at ₹5,090 crore. This decline occurred despite Net Interest Income (NII), the bank's core revenue stream, inching up by 1.9% to ₹13,744 crore, marginally exceeding analyst expectations. The sequential growth in advances was 3.7%, with deposits growing 4.8% quarter-on-quarter.
One-Time Provision Impact
A substantial ₹1,231 crore one-time standard asset provision was made during the September quarter, following an advisory from the Reserve Bank of India. This provision relates to two discounted crop loan variants and is slated for reversal into the profit and loss account by March 31, 2028, as these loans are recovered or closed. This specific provisioning played a role in the net profit figures.
Market Reaction and Outlook
Shares of Axis Bank Ltd. closed at ₹1,286.50 on January 5, marking a 1.55% gain, indicating investor resilience or a focus on the underlying operational growth rather than the quarterly profit dip. Chief Executive Officer Amitabh Chaudhry expressed confidence in the bank's trajectory, stating it is poised for growth exceeding the industry average through fiscal year 2026 and beyond.