Axis Bank Ltd, India’s fourth-largest private sector lender, reported a weaker-than-expected performance for the September quarter (Q2 FY26), with net profit declining 26% year-on-year to ₹5,090 crore, compared to ₹6,918 crore in the same period last year. On a sequential basis, profit was down 12.3% from ₹5,806 crore in the June quarter.
The decline was primarily due to a one-time standard asset provision of ₹1,231 crore related to two discontinued crop loan variants. The bank stated that this provision, made following an RBI advisory after its FY25 annual inspection, will be reversed once the affected loans are recovered or closed, or by March 31, 2028, whichever comes earlier.
NII Beats Estimates, Margins Steady
Axis Bank’s Net Interest Income (NII) — the difference between interest earned and paid — stood at ₹13,745 crore, registering a 2% YoY increase and beating analysts’ expectations of a decline. The bank’s Net Interest Margin (NIM) also remained healthy at 3.5%, surpassing market estimates.
Asset Quality Stable
The bank’s asset quality remained broadly steady on a sequential basis.
As of September 30, 2025, Gross Non-Performing Assets (GNPAs) stood at 1.46%, while Net NPAs (NNPAs) were at 0.44% — slightly improved from 1.57% and 0.45%, respectively, at the end of June 2025.
However, both metrics were marginally weaker than the 1.44% GNPA and 0.34% NNPA recorded in the same quarter last year.
The Provision Coverage Ratio (PCR) came in at 70%, compared to 71% in Q1FY26 and 77% in Q2FY25.
Slippages Moderate Sequentially
Gross slippages during the quarter were reported at ₹5,696 crore, improving from ₹8,200 crore in the previous quarter, though higher than ₹4,443 crore recorded in the same period last year.
Outlook
While Axis Bank’s Q2 results reflected short-term margin pressure and higher provisioning, the lender maintained strong operational stability and healthy asset quality, positioning it for gradual recovery in the coming quarters.
Disclaimer:
This article is intended solely for educational and informational purposes. The securities or companies mentioned are provided as examples and should not be considered as recommendations. Nothing contained herein constitutes personal financial advice or investment recommendations. Readers are advised to conduct their own research and consult a qualified financial advisor before making any investment decisions.
Investments in securities markets are subject to market risks. Please read all related documents carefully before investing.