Axis Bank’s Q2 Profit Misses Street Estimates Despite Strong Interest Income and Stable Asset Quality

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Axis Bank reported a net profit of ₹50.9 billion in Q2 FY2025, below the IBES estimate of ₹58.63 billion. The bank’s net interest income stood at ₹137.45 billion, supported by loan growth, while provisions rose to ₹35.47 billion. Asset quality remained steady with gross NPA at 1.46%, signaling sustained stability.

Axis Bank Ltd. reported a mixed set of results for the second quarter of FY2025. While the private lender posted robust core lending income and maintained asset quality, its bottom line came in lower than expectations due to elevated provisions and contingencies.

According to the regulatory filing, net profit stood at ₹50.9 billion, missing the analysts’ consensus estimate of ₹58.63 billion, as higher provisioning for potential credit losses weighed on quarterly earnings. The bank’s provisions and contingencies rose sharply to ₹35.47 billion, reflecting prudence amid muted macroeconomic conditions and selective corporate exposures.

Despite the profit miss, net interest income (NII) grew strongly to ₹137.45 billion, supported by improved yields and expanding retail and SME portfolios. Advances continued to grow at a healthy pace, underpinned by increased consumer lending and steady corporate credit demand.

Asset quality remained resilient with the gross non-performing asset (NPA) ratio at 1.46%, one of the lowest among large private lenders. The bank’s net NPA was estimated to be below 0.4%, indicating strong provisioning coverage and disciplined risk management.

Analysts noted that Axis Bank’s consistent balance-sheet strength and credit control measures keep its long-term outlook solid, despite near-term profit headwinds. The lender’s digital and retail transformation strategy continues to enhance customer engagement and loan origination efficiency, helping sustain margin stability.

Major Takeaways

Net interest income: ₹137.45 billion in Q2 FY2025, up on broad-based loan growth.
Net profit: ₹50.9 billion, below IBES estimate of ₹58.63 billion, due to higher provisioning.
Provisions: ₹35.47 billion, reflecting conservative risk positioning.
Asset quality: Gross NPA at 1.46%, indicating stable credit conditions and solid recovery trends.
Loan growth: Retail and SME segments driving expansion as demand stays firm.
Earnings outlook: Analysts see margin stability but near-term profitability pressure from provisioning cycle.
Valuation view: Despite the earnings miss, strong core metrics may support future re-rating as credit costs normalize.

Sources: Axis Bank Exchange Filing; Bloomberg; Reuters; IBES Estimates.

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Axis Bank’s Q2 Profit Misses Street Estimates Despite Strong Interest Income and Stable Asset Quality

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