Axis Bank Q1FY27 net profit jumps 22.5% as lower provisions offset pressure on other income
New Delhi, July 18
Axis Bank's standalone net profit rose 22.5 per cent year-on-year to Rs 7,113.92 crore in Q1FY27, supported by a sharp decline in provisions and contingencies, even as pressure on other income and a rise in interest expenses moderated the growth in core operating profit. Net interest income increased 8 per cent to Rs 14,646.10 crore, while operating profit rose a modest 1.3 per cent to Rs 11,659.10 crore, according to the bank's exchange filing on Saturday.
The sharp rise in net profit was primarily driven by lower provisions. Provisions and contingencies fell 43.7 per cent year-on-year to Rs 2,222.54 crore in the quarter, from Rs 3,947.66 crore in Q1FY26. This helped profit before tax rise 24.8 per cent to Rs 9,436.56 crore, despite higher tax expenses during the quarter.
The growth in NII was supported by an increase in interest earned, which rose 9.4 per cent year-on-year to Rs 33,985.63 crore. However, interest expended increased at a faster pace of 10.5 per cent to Rs 19,339.53 crore, limiting the expansion in net interest income.
The bank's operating profit growth remained subdued as the rise in operating expenses and decline in other income offset the increase in core interest income. Other income fell 7.2 per cent year-on-year to Rs 6,735.42 crore, while operating expenses increased 4.5 per cent to Rs 9,722.42 crore. The decline in other income was led by lower non-interest revenue during the quarter.
Employee costs declined to Rs 3,058 crore from Rs 3,261.75 crore in the year-ago period, but other operating expenses rose to Rs 6,664.42 crore from Rs 6,040.90 crore, keeping overall cost pressures elevated. As a result, total expenditure excluding provisions increased 8.4 per cent year-on-year to Rs 29,061.95 crore.
Asset quality remained relatively stable, with gross NPA at 1.28 per cent and net NPA at 0.39 per cent as of June 30, 2026. The bank's return on assets stood at 1.51 per cent, compared with 1.47 per cent a year earlier.
Axis Bank's Q1 performance reflected a strong bottom-line recovery led by lower credit provisions, while core earnings growth remained more moderate amid higher funding costs and weaker non-interest income.
On Friday, shares of Axis Bank settled at Rs 1,329.40, up nearly 2 per cent on the National Stock Exchange.
— ANI
Reader Comments
As a shareholder, I am happy with the numbers! Lower provisions have really helped the bottom line. But the 7.2% drop in other income is concerning - non-interest income is a key growth driver for private banks. Hope management addresses this in the next quarters.
The stable asset quality (GNPA at 1.28%) is reassuring. Axis Bank seems to be managing its loan book well unlike some other private banks. However, the declining employee costs make me wonder if they are cutting corners on staff to prop up profits. Banks need to treat their employees well.
Actually quite disappointed. Core operating profit only up 1.3% - that's the real story. Lower provisions are a temporary factor (good for one year maybe), but if core business isn't growing strongly, this profit growth won't last. Still, market seems happy with the 2% stock rally.
RoA improving to 1.51% from 1.47% is a positive sign. For a large private bank like Axis, every basis point matters. But I think the bigger picture is that Indian banking sector is in a sweet spot - credit growth is decent and NPAs are under control. Good time to hold bank stocks. 👍
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