Axis Bank Q2 Net Profit Jumps 38% to Rs 7,003 Crore as NII Beats Estimates

Private sector lender Axis Bank announced its financial results for the second quarter (Q2 FY27), posting a standalone net profit of Rs 7,003 crore. The figure represents an increase of nearly 38% compared to the Rs 5,089 crore recorded in the corresponding quarter of the previous financial year.

While bottom-line growth remained robust, net profit slightly trailed Street expectations, missing the consensus poll estimate of Rs 7,132 crore by roughly 1.8%. However, core operations showed notable resilience, supported by healthier asset quality metrics and lower provisions.

Key Earnings Highlights

Financial Performance:

• Net Profit: Rose 37.6% year-on-year to Rs 7,003.3 crore compared to Rs 5,090 crore in Q2 FY26.
• Net Interest Income (NII): Increased 11.8% year-on-year to Rs 15,372 crore, up from Rs 13,744 crore in the year-ago period. This beat analyst expectations, including the CNBC-TV18 estimate of Rs 14,970 crore and the Bloomberg estimate of Rs 15,259 crore.
• Net Interest Margin (NIM): Reported at 3.36% for the quarter.
• Provisions: Total provisions dropped significantly to Rs 1,694 crore, down from Rs 2,223 crore in the preceding quarter and Rs 3,547 crore in Q2 FY26.

Asset Quality Strengthens

The bank witnessed sequential as well as annual improvements across its bad loan portfolios. Gross non-performing assets (GNPAs) and net non-performing assets (NNPAs) both trended downward during the three months ended September.

Bad Loan Metrics:

• Gross NPA Ratio: Stood at 1.16%, improving from 1.28% in the June quarter and 1.46% reported in the previous year.
• Net NPA Ratio: Eased to 0.35%, compared to 0.39% in the prior quarter.
• Absolute Gross NPAs: Declined to Rs 16,778 crore against Rs 17,124.3 crore sequentially.
• Absolute Net NPAs: Contracted to Rs 5,054 crore from Rs 5,192.6 crore in the first quarter.

Market Context and Sector Impact

Axis Bank's operational performance reflects broader stability in India's commercial banking environment, where disciplined underwriting and lower credit costs have helped cushion margins against competitive deposit repricing.

The higher-than-expected NII is expected to offer support to banking counters on Dalal Street when markets resume trading on Monday, with investors closely watching management commentary regarding loan disbursement trends, deposit growth, and full-year margin guidance.

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