Axis Bank Tumbles on Profit Miss and Asset Quality Woes

Axis Bank, India's third-largest private lender, witnessed a significant decline in its share value, dropping 5.4% to a 14-month low. This downturn follows the bank's announcement of a 4% increase in net profit for the December quarter, totaling ₹6,304 crore, which fell short of market expectations. The shortfall is attributed to slower loan growth and a substantial rise in provisions for bad loans, which more than doubled to ₹21.56 billion. Additionally, the bank's gross non-performing asset ratio edged up to 1.46%, indicating a deterioration in asset quality. Analysts anticipate that the normalization of retail asset quality may take several quarters, potentially leading to further slippages. In response, multiple analysts have adjusted their price targets for Axis Bank's stock. 

Source: Reuters