Axis Bank Q2 net profit jumps 38% to Rs 7,003 crore, misses estimates; NII beats poll, asset quality improves

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Axis Bank on Saturday reported a 37.6 percent year-on-year increase in net profit to Rs 7,003.3 crore for the second quarter of FY27, falling short of market expectations. The private sector lender's net interest income (NII) rose 11.8 percent to Rs 15,371.4 crore, exceeding analysts' estimates, while asset quality improved during the quarter.

According to a CNBC TV18 poll, analysts had expected Axis Bank to report a net profit of Rs 7,132 crore, representing a 40 percent year-on-year increase. The reported profit was approximately 1.8 percent below the estimate. Meanwhile, NII exceeded the poll estimate of Rs 14,970 crore by approximately 2.7 percent.

The bank reported a net interest margin (NIM) of 3.36 percent for the July-September quarter. Excluding the impact of foreign currency non-resident (FCNR-B) deposits, NIM stood at 3.47 percent.

Axis Bank's operating profit increased 6 percent year on year to Rs 11,083 crore, while core operating profit rose 11 percent to Rs 10,998 crore. Other income declined 1 percent to Rs 6,531 crore, although fee income grew 6 percent to Rs 6,381 crore.

Provisions and asset quality

Axis bank reported provisions and contingencies of Rs 1,694 crore for the fiscal second quarter, including specific loan-loss provisions of Rs 1,564 crore.

Asset quality improved, with the gross non-performing assets (GNPA) ratio declining to 1.16 percent from 1.46 percent a year earlier and 1.28 percent in the preceding quarter. The net NPA ratio fell to 0.35 percent from 0.44 percent a year earlier and 0.39 percent in the April-June quarter.

Gross slippages declined to Rs 4,762 crore from Rs 5,566 crore in the preceding quarter and Rs 5,696 crore in the year-ago period. The bank's annualised net credit cost stood at 0.45 percent, down 28 basis points year on year and 18 basis points sequentially.

The provision coverage ratio stood at 70 percent, unchanged from both the preceding quarter and the year-ago period.

Axis Bank reported a 23 percent year-on-year increase in advances to Rs 13.74 lakh crore as of September 30, 2026. Advances grew 9 percent sequentially.

Retail loans increased 16 percent year on year to Rs 7.40 lakh crore, accounting for 54 percent of the bank's net advances. SME loans grew 25 percent year on year to Rs 1.65 lakh crore, while corporate loans expanded 34 percent.

Total deposits rose 21 percent year on year and 6 percent sequentially to Rs 14.52 lakh crore on a month-end basis. Term deposits grew 27 percent year on year, while current account and savings account deposits increased 7 percent and 12 percent, respectively. The CASA ratio stood at 36 percent.

The bank's cost of funds declined by 8 basis points year on year.

Capital adequacy

Axis Bank's capital adequacy ratio stood at 16.27 percent as of September 30, while its common equity tier-1 (CET-1) ratio was 14.61 percent. The bank said it had added 23 basis points to its CET-1 ratio during the first half of FY27.

The lender also reported additional provisions of Rs 8,006 crore over and above those reflected in its reported capital adequacy ratio, providing an additional capital cushion equivalent to approximately 49 basis points.

Commenting on the results, Amitabh Chaudhry, managing director and CEO of Axis Bank, said the bank continued to focus on digital payments, secure banking, AI-driven innovation and strategic partnerships to strengthen its customer offerings.

Axis Bank shares closed 0.16 percent higher at Rs 1,290 on Friday, ahead of the earnings announcement. The stock has gained 1.2 percent so far this year, outperforming the Nifty 50, which has declined 11.5 percent over the same period. The bank's market capitalisation stood at approximately Rs 4.02 lakh crore.