Axis Bank Shares Climb 1.86% to Rs. 1,191.30 Following Q2 Earnings

Overview :

• Axis Bank's Q2 results highlighted that the profit declined 26% YoY on account of increased provisions, but core income and margins were robust.

• Brokerages such as Jefferies, CLSA, and HSBC pointed toward steady NIMs, better credit quality, and favorable growth momentum.

• Axis Bank shares jumped more than 4% after earnings, topping the Sensex and Nifty 50 gainer list.

Axis Bank share price surged on October 16, after its September quarter (Q2 FY25) performance, which showed resilience in core business despite a profit decline. The stock rose as high as 4.04% to Rs. 1,216.90 on the NSE and 4.16% to Rs. 1,217.65 on the BSE. It had a market capitalization of Rs. 3.69 lakh crore. The trading volume of Axis Bank shares was 11.29 million shares with a turnover of Rs. 1,34,419.47 lakh at press time. Let’s dive into Axis Bank share price analysis based on Moneycontrol data.

Q2 Performance: Profit Slumps on Higher Provisions

Axis Bank stock posted a net profit of Rs. 5,090 crore in the July-September quarter, down 26% from Rs. 6,918 crore in the corresponding period of the last year. The fall was mainly on account of a sharp rise in bad loan provisioning, which rose 61% to Rs. 3,547 crore, from Rs. 2,204 crore during the previous year.

But the bank's net interest income (NII), the spread between interest received on loans and interest paid on deposits, increased 2% year-on-year to Rs. 13,744 crore from Rs. 13,483 crore in Q2 FY24.

The asset quality of the lender remained steady, with 1.46% gross non-performing assets (NPA), marginally up from 1.44% last year. The net NPA increased 10 basis points to 0.44%, and total gross NPAs rose to Rs. 17,308 crore from Rs. 15,466 crore.

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Analyst Views: Overwhelmingly Positive on Growth Outlook

International brokerage houses were mildly divided but overwhelmingly positive in their perception of Axis Bank share price performance.

Axis Bank share price chart on Moneycontrol shows gains of 2.26% at 2.48 PM:

Jefferies pointed out that the lender's performance was stronger than expected on the back of better net interest margins (NIMs) and robust 12% and 11% loan and deposit growth, respectively. It also pointed out moderation in slippages and core credit expenses, reflecting a favorable financial path.

CLSA described that after taking one-off provisions into account, profit before tax exceeded expectations, with strong NII and pre-provision operating profit. The company referred to Q2 as a ‘change in trend’ quarter due to the improvement in deposits and softer slippages.

Bernstein observed that Axis Bank showed sequential improvement in growth numbers and had a sharp recovery in asset quality. Brokerage expects credit expenses to reduce in future quarters, as the recent spike in provisions was largely attributed to one-off farm advances.

At the same time, HSBC described the bank's Q2 figures as ‘strong operationally’, highlighting good margins and asset quality, although it warned against the increase in provisions being a cause for concern. The company increased FY26–28 EPS estimates by as much as 5.3%, reflecting optimism about Axis Bank's long-term growth opportunities.

JPMorgan was also of the same view, saying that although earnings fell short of expectations because of provisions for crop loans, trends in asset quality are stabilizing, and corporate loans are powering growth.

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CEO's Vision: Building a Future-Ready Bank

Axis Bank MD and CEO Amitabh Chaudhry reiterated that the bank is being transformative in a sustainable manner. “From making digital safety stronger to making credit more accessible, our innovations are designed to address genuine needs at scale," he said. "Real transformation is not about technology but about relevance, resilience, and responsibility."

Analysts on Moneycontrol gave the stock a buy to outperform rating, 61% buy, 20% outperform, and 20% hold. Axis Bank stock continues to be one of the best private sector performers, supported by stable NIMs, improving growth momentum, and steadily improving asset quality despite short-term pressure on profits.

FAQs

1. Did Axis Bank's profit decrease in Q2 FY25?

Axis Bank's profitability fell 26% year-on-year because of a sharp increase in provisions for bad loans. Provisions increased 61% to Rs. 3,547 crore, mainly agricultural advances and the one-off issues impacting the quarter.

2. How did the bank fare in income and margins?

The bank's net interest income (NII) increased almost 2% year-on-year to Rs. 13,744 crore, indicating steady margins. Net interest margins (NIMs) were strong, as underpinned by strong loan and deposit growth.

3. How do analysts perceive Axis Bank's Q2 performance?

Most analysts are optimistic. Jefferies, CLSA, and HSBC pointed to strong operating performance, higher-than-expected NIMs, and enhanced asset quality as being indicative of resilience and long-term growth prospects.

4. How did Axis Bank's asset quality evolve this quarter?

 Axis Bank's asset quality was generally stable. Its gross NPA ratio remained at 1.46%, somewhat higher than 1.44% a year ago, while net NPA increased to 0.44%. Further improvement in subsequent quarters is expected by analysts.

5. Must investors buy Axis Bank shares right now?

With analysts' ‘Buy’ and ‘Outperform’ ratings, Axis Bank is still a solid private sector performer. With consistent loan and deposit growth and under control credit costs, it seems to be appealing to long-term investors.