Q1 Profit Drops 4% YoY to Rs. 5,806 Crore: Axis Bank’s Q1 FY26 standalone net profit fell to Rs. 5,806 crore, down 3.77% from Rs. 6,034 crore last year. On a quarter-on-quarter basis, profit dropped 18.42% from Rs. 7,117 crore in Q4 FY25. This decline was driven by internal policy changes and technical adjustments to NPA recognition
Shares Fall Over 6% Post-Earnings: Following the announcement, Axis Bank shares tumbled 6.36% to Rs. 1,086 on the NSE. Investors reacted negatively to the lower profit and concerns around rising slippages and provisioning. Market sentiment was further affected by the subdued net interest income and margin performance
Core Income Grows, But Technical Hit Hurts: The bank’s core Net Interest Income (NII) rose a modest 1% to Rs. 13,560 crore. However, a Rs. 614 crore “technical impact” related to changes in how the bank upgrades or classifies NPAs eroded overall profitability. Net Interest Margin also fell to 3.80% from 4.05% YoY
Shift in NPA Policy to Mirror Peer Standards: Axis Bank voluntarily adopted a more conservative asset classification framework after benchmarking against a peer. CEO Amitabh Chaudhry and CFO Puneet Sharma emphasized that the move aligns with prudent practices and isn’t driven by external economic concerns
Surge in Gross Slippages to Rs. 8,200 Crore: Gross slippages nearly doubled to Rs. 8,200 crore in Q1, compared to Rs. 4,805 crore in the previous quarter. Excluding the technical changes, slippages stood at Rs. 5,491 crore. The retail segment, particularly unsecured credit, was most impacted, with agriculture contributing seasonally
Provisions Jump 2x to Rs. 3,948 Crore: Provisions more than doubled YoY, rising to Rs. 3,948 crore from Rs. 2,039 crore. The increase was significantly above the Rs. 1,359 crore seen in Q4 FY25. The spike in provisioning reflects Axis Bank’s recalibrated NPA recognition and its impact on asset quality metrics
Looking Ahead – Axis Eyes Growth Acceleration in FY26: Despite short-term setbacks, Axis Bank remains optimistic. Retail credit grew 6%, corporate loans 9%, and MSME credit surged 16%. The management says it now has the 'right platform' to outpace system-wide growth, signaling a focus on long-term stability and performance rebound
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