Synopsis : Axis Bank reported a strong performance for the first quarter of FY27, with consolidated net profit rising 22.2 per cent year-on-year to Rs 7,632 crore, beating market estimates. The private sector lender witnessed healthy growth in net interest income, strong loan and deposit growth, lower provisioning and improved asset quality, reflecting robust business momentum despite a challenging banking environment.
Axis Bank posted a strong set of financial results for the April-June quarter of FY27, reporting a 22.2 per cent year-on-year increase in consolidated net profit to Rs 7,632.31 crore. The lender outperformed market expectations as lower provisioning expenses and healthy growth in its core banking business supported earnings during the quarter.
The bank's Net Interest Income (NII), one of the most closely watched indicators of banking performance, increased 8.6 per cent year-on-year to Rs 15,327.26 crore from Rs 14,109.62 crore in the corresponding quarter last year. The growth was driven by steady expansion in the loan book and continued strength in lending activity across retail and corporate segments.
Interest expenses also increased during the quarter, rising 10.8 per cent year-on-year to Rs 20,214.70 crore as competition for deposits remained high across the banking sector. Despite higher funding costs, the bank managed to deliver healthy growth in its core income.
Total expenditure, excluding provisions and contingencies, rose 9 per cent to Rs 30,714.07 crore. Operating expenses increased 5.5 per cent to Rs 10,499.37 crore, while operating profit grew 2.3 per cent to Rs 12,498.75 crore, reflecting disciplined cost management despite continued investments in business expansion and technology.
One of the biggest contributors to the sharp rise in profitability was a significant reduction in provisions and contingencies. These declined 42.1 per cent year-on-year to Rs 2,337.47 crore from Rs 4,034.19 crore in the corresponding quarter of FY26. Lower provisioning, combined with steady operating performance, helped profit before tax increase 24.2 per cent to Rs 10,161.28 crore.
The bank also clarified that it did not utilise the Rs 2,001 crore one-time standard asset provision that had been created during the March quarter of FY26. Retaining this provision provides an additional cushion against potential future credit stress.
Axis Bank continued to witness strong business growth during the quarter. Consolidated advances increased 19.3 per cent year-on-year to Rs 13.16 trillion, reflecting healthy demand across retail, corporate and SME lending segments. Deposits also registered robust growth, rising 18.2 per cent to Rs 13.71 trillion, while the group's total assets expanded 20.1 per cent to Rs 19.86 trillion.
Retail banking remained the bank's largest business segment. Revenue from the retail business increased 7.9 per cent to Rs 39,517.11 crore, while profit before tax more than doubled to Rs 3,851.40 crore compared with Rs 1,647.83 crore in the same period last year. The sharp increase highlights improved profitability and continued strength in consumer banking.
Corporate and wholesale banking also delivered a solid performance. Revenue from the segment rose 20 per cent year-on-year to Rs 15,026.97 crore, while segment profit before tax increased 21.7 per cent to Rs 3,601.14 crore. Treasury operations, however, reported a weaker performance, with profit before tax declining 30.5 per cent to Rs 1,690.16 crore amid changing market conditions.
Asset quality continued to improve during the quarter. On a standalone basis, the Gross Non-Performing Asset (GNPA) ratio declined to 1.28 per cent from 1.57 per cent a year earlier, while the Net NPA ratio improved to 0.39 per cent from 0.45 per cent. The improvement reflects effective credit monitoring, healthy recoveries and prudent risk management.
The bank's standalone Capital Adequacy Ratio (CAR) stood at 16.67 per cent at the end of June, compared to 16.85 per cent a year ago. Although slightly lower, the capital position remains comfortably above regulatory requirements and provides sufficient headroom for future business growth.
During the quarter, Axis Bank also strengthened its financial services ecosystem through investments in its subsidiaries. The bank infused Rs 1,499.26 crore into Axis Finance and invested an additional Rs 380.60 crore in Axis Max Life Insurance. Separately, Axis Finance raised Rs 750 crore through a preferential issue to Kedaara Pearl Holding and Kedaara Capital Fund IV AIF, reducing Axis Bank's ownership in the subsidiary to 94.92 per cent.
Overall, Axis Bank delivered another strong quarterly performance, supported by healthy growth in core income, lower credit costs, improving asset quality and robust loan and deposit growth. Investors will closely watch the bank's margin trends, credit growth and asset quality in the coming quarters as India's banking sector continues to benefit from improving economic activity.
Disclaimer : This content is for informational and educational purposes only. Investors and readers should conduct their own research and consult professional financial advisors before making any investment decisions.
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