Axis Bank reported a 37.6% increase in net profit to Rs 7,003 crore, falling slightly short of analyst estimates of Rs 7,132 crore. While the lender saw robust loan growth of 23% and improved asset quality, investors will be closely watching how the bank manages margin pressure amid stiff sector-wide competition for deposits.
Axis Bank’s second-quarter results for fiscal year 2027 show a mix of strong operational growth and a slight deviation from market profit expectations. The bank reported a net profit of Rs 7,003 crore, a 37.6% rise compared to the same period last year. While the bottom line missed the analyst consensus of Rs 7,132 crore, the bank demonstrated core business strength through its net interest income, which is the money earned from lending activities after paying out interest on deposits.
The bank’s net interest income grew by 11.8% to reach Rs 15,371 crore, beating the expected Rs 14,970 crore. This growth in core income suggests that the bank's fundamental lending business remains active and productive.
A significant positive for the bank is the improvement in asset quality. The gross non-performing assets ratio dropped to 1.16%, down from 1.46% in the previous year. The net NPA ratio also improved to 0.35%. This is a crucial metric for investors, as lower bad loans generally signal a healthier, more reliable loan book. The bank also reported a decline in gross slippages—which refers to the fresh addition of bad loans—to Rs 4,762 crore from Rs 5,566 crore in the June quarter.
The bank’s loan book grew by 23% year-on-year to reach Rs 13.74 lakh crore. The growth was led by corporate loans, which jumped 34%. SME lending also grew by 25%, while retail loans rose by 16%. This shift in the loan mix, where corporate growth is currently outpacing retail growth, is a factor investors often track to understand where the bank is deploying capital and taking on risk.
Like many other lenders in the Indian banking sector, Axis Bank is currently operating in a highly competitive environment for deposits. With banks across the country fighting to attract deposits to support their loan growth, maintaining profit margins has become a challenge for the entire industry. Investors will be watching whether the bank can continue to grow its deposit base, which rose 21% to Rs 14.52 lakh crore, without sacrificing its profit margins due to the higher cost of attracting these funds.
The management’s future commentary on credit costs, margins, and the outlook for deposit growth will be the next key updates for shareholders. The bank remains well-capitalized with a capital adequacy ratio of 16.27%. The upcoming quarters will reveal whether the bank can maintain this improved asset quality while navigating the broader sector pressures on interest margins and funding costs.