Axis Bank's Q4 profit falls 1.63 pc; declining margins, rising costs weigh on performance

IANS April 24, 2025 280 views

Axis Bank experienced a slight decline in Q4 profits, with net profit falling 1.63% year-on-year to Rs 7,489.71 crore. The bank's performance was impacted by rising expenses and a marginal drop in net interest margins. To strengthen its financial position, Axis Bank announced an ambitious fundraising plan of Rs 55,000 crore through debt and equity instruments. Despite the challenges, the bank maintained a return on equity of 16.02% and recommended a final dividend of Re 1 per share.

"Earnings miss and declining margins could weigh on future sentiment" - Financial Reports
Mumbai, April 24: Axis Bank on Thursday reported a 1.63 per cent year-on-year (YoY) drop in its consolidated net profit for the March 2025 quarter (Q4 FY25) to Rs 7,489.71 crore from Rs 7,613.55 crore in the same quarter last year.

Key Points

1

Bank's net profit falls to Rs 7,489.71 crore in Q4

2

Net interest margin drops to 3.97% from 4.06%

3

Fundraising plan of Rs 55,000 crore announced

4

Final dividend of Re 1 per share recommended

While the bank’s interest income rose 7.35 per cent to Rs 32,452.32 crore, its expenses also went up by 7.05 per cent to Rs 28,512.99 crore. This rise in costs weighed on its overall profitability.

One of the key areas of concern in the results was the net interest margin (NIM), which dropped to 3.97 per cent from 4.06 per cent a year ago -- a decline of 9 basis points.

This fall in margins came despite a 6 per cent rise in net interest income (NII), which stood at Rs 13,811 crore for the quarter.

Along with the earnings, Axis Bank also announced a fundraising plan worth Rs 55,000 crore. Of this, Rs 35,000 crore will be raised through various debt instruments such as long-term bonds and masala bonds.

The remaining Rs 20,000 crore will be raised via equity or related securities. The bank’s board also decided to increase the borrowing limit to Rs 3 lakh crore.

The board has recommended a final dividend of Re 1 per share for FY25, according to its stock exchange filing.

Axis Bank’s return on equity (ROE) stood at 16.02 per cent, with a price-to-earnings ratio (P/E) of 14.17 and a price-to-book value of 2.27.

The earnings per share (EPS) were reported at Rs 85.19, as per the company’s filings. Even though the stock closed marginally higher at Rs 1,207.30 on the Bombay Stock Exchange (BSE) on Thursday, investors remained cautious after the quarterly performance.

"While the stock has gained 12.62 per cent so far this year, the earnings miss and declining margins could weigh on future sentiment," reports said.

As of March 2025, promoters held an 8.18 per cent stake in the bank.

Reader Comments

R
Rahul K.
Not surprised by these numbers. The banking sector has been facing margin pressures across the board. At least their NII grew 6% - that's a silver lining. Let's see how the fundraising plan works out.
P
Priya M.
That dividend of Re 1 per share is disappointing 😕 With profits falling, I guess they're being cautious, but shareholders deserve better returns after such a long investment period.
A
Amit S.
The 55,000 crore fundraising plan seems ambitious! Hope they utilize it well. Axis has been decent with their expansion plans historically. 🤞
N
Neha T.
As a customer, I'm more concerned about service quality than these numbers. Their app has improved a lot recently, so I'll keep banking with them unless rates become unfavorable.
S
Sanjay R.
Respectful criticism: The bank needs to be more transparent about how they plan to address the margin compression. A 9 bps drop in NIM is significant, and investors deserve a clearer roadmap.
K
Kavita P.
The stock still looks fundamentally strong with ROE above 16% and reasonable valuations. Short-term blips happen in banking - I'm holding my shares for long term growth! 💪

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Axis Bank Q4 Earnings Banking Sector Financial Performance Mumbai Stock Market