Axis Bank profit rose 37.6% year over year to ₹7,003 crore on a standalone basis in the quarter ended September 30, 2026, but narrowly missed analyst expectations. Higher operating expenses and weaker other income limited the benefit from strong lending growth and a sharp decline in provisions, the Indian private-sector lender’s October 17 results showed.
Key Takeaways
- Standalone profit fell ₹121 crore short of the ₹7,124 crore analyst consensus.
- Net interest income rose 11.8%, while operating expenses increased 9% year over year.
- Provisions fell 52.2%, and the gross bad-loan ratio improved to 1.16%.
Table of Contents
- Axis Bank profit falls short despite strong annual growth
- Lending income strengthens as other income weakens
- Lower provisions provide a major earnings boost
- Conclusion
Axis Bank profit falls short despite strong annual growth
The September-quarter result compared with ₹5,090 crore a year earlier. Analysts had expected ₹7,124 crore, based on LSEG-compiled estimates, putting the reported result about 1.7% below consensus.
The annual improvement also contrasted with a modest sequential decline: profit was ₹7,114 crore in the preceding quarter. Strong year-over-year growth therefore did not translate into an increase from the June quarter.
Axis Bank’s Q2 FY27 results announcement showed operating expenses of ₹10,819 crore, up 9% from a year earlier and 11% from the preceding quarter. Operating profit increased 6% year over year to ₹11,083 crore, substantially slower than net profit.
| Item | Details |
|---|---|
| Net interest margin | 3.36% for Q2 FY27; 3.47% excluding the FCNR(B) impact. |
| Fee income | ₹6,381 crore, up 6% year over year. |
| Net non-performing asset ratio | 0.35%, down 9 basis points year over year. |
| Total capital adequacy ratio | 16.27% at September 30, 2026. |
Lending income strengthens as other income weakens
Net interest income—the difference between interest earned and interest paid—rose 11.8% to ₹15,371 crore. Total loans expanded 23% from a year earlier, while deposits increased 20.7%.
Those headline balance-sheet growth rates included an impact from foreign-currency non-resident deposits backed by advances from the bank’s international branches. Excluding that specified impact, advances grew 19% and deposits grew 17%, the bank said.
Other income, which includes earnings from bonds and other investments, declined 1.4% to ₹6,531 crore. Rising bond yields and rupee volatility weighed on treasury income during the quarter, tempering the contribution from expanding lending.
Lower provisions provide a major earnings boost
Provisions for potential bad loans and other contingencies fell 52.2% to ₹1,694 crore. That reduction helped bottom-line profit grow much faster than operating profit, making lower provisioning an important part of the annual earnings improvement.
Asset quality also strengthened. The gross non-performing asset ratio declined to 1.16% at the end of September from 1.28% three months earlier, a reduction of 12 basis points.
Conclusion
Axis Bank’s September-quarter earnings combined strong lending growth and improving asset quality with pressure from costs and treasury income. The next quarterly results will provide a further check on whether operating earnings can strengthen without such a large contribution from falling provisions.
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