Axis Bank Q1 Profit Slips 4% to Rs.5,806 Cr as NII Stagnates, Asset Quality Weakens

Muted profit and rising NPAs weigh on sentiment; stock dips 1% despite operating profit growth and steady loan book

Axis Bank Ltd on July 17 reported a 3.8% year-on-year decline in consolidated net profit to ₹5,806.14 crore for the quarter ended June 30, 2025, missing Street expectations due to a sharp jump in provisions and weakening asset quality. Sequentially, profit fell nearly 18% from the March quarter’s ₹7,051 crore.

While Net Interest Income (NII) rose marginally by 0.8% YoY to ₹13,560 crore, the bank’s performance was dragged by a steep rise in gross NPAs and net NPAs, with the former climbing to ₹17,765 crore, up from ₹14,490 crore in Q4FY25. The bank reported provisions of ₹3,948 crore, almost 3x higher than the previous quarter.

• Net Profit: ₹5,806 crore (–4% YoY, –18% QoQ)

• NII: ₹13,560 crore (+0.8% YoY, –2% QoQ)

• Provisions: ₹3,948 crore (vs ₹1,359 crore QoQ)

• Gross NPA: ₹17,765 crore | Net NPA: ₹5,066 crore

Also Read : Wipro Q1 Profit Up 11% to Rs.3,330 Cr, Beats Forecasts; Declares Rs.5 Dividend

Stock Reaction and Technical View

Shares of Axis Bank ended 0.63% lower at ₹1,161 on the NSE post-results, reflecting investor disappointment over rising slippages and narrowing margins. The bank’s Net Interest Margin (NIM) fell to 3.80%, down from 3.97% in Q4FY25 and 4.05% a year ago, underscoring margin pressure across the sector.

On technical charts, Axis Bank remains in a neutral-to-weak setup with RSI near 47 and price action below key short-term moving averages. The stock faces strong resistance at ₹1,190, while support lies near ₹1,140.

“Rising credit costs and slippage in asset quality remain key overhangs despite steady core profit,” said a banking sector analyst from a Mumbai-based institutional brokerage.

• RSI: 47 (Neutral zone)

• Support: ₹1,140 | Resistance: ₹1,190

• High provisions and rising NPAs overshadow loan growth

Loan Book & Deposit Trends Remain Resilient

Despite profit pressure, loan growth remained stable. Total advances grew 8% YoY and 2% QoQ to ₹10.59 lakh crore, with retail loans accounting for 59% of total advances. The secured retail loan share stood at 72%, led by home loans which formed 27% of the retail book.

In deposits, total base rose 9% YoY to ₹11.61 lakh crore, while CASA ratio remained steady at 40%. Term deposits led the momentum, growing 12% YoY, whereas savings deposits grew just 3%.

The bank’s operating profit rose 14% YoY to ₹11,515 crore, while core operating profit (excluding treasury and other one-offs) grew 5% YoY to ₹10,095 crore. However, the improvement in operating performance was outweighed by elevated provisioning and asset quality slippage.

• Advances: ₹10.59 lakh crore (+8% YoY)

• Deposits: ₹11.61 lakh crore (+9% YoY)

• CASA ratio: 40% | Term deposits: +12% YoY

• Retail loans: ₹6.23 lakh crore | Home loans: 27% of retail book

Trading Outlook: What to Watch in Axis Bank

With Q1 results now priced in, Axis Bank may see muted price action in the near term unless clarity emerges on asset quality stabilization. Rising gross and net NPA ratios, alongside margin compression, are likely to keep investors cautious. However, steady loan growth and core operating performance may offer downside support.

Focus will shift to upcoming RBI policy signals, sectoral credit growth data, and Q1 earnings from ICICI Bank and Kotak Mahindra Bank, which may set the tone for the broader Bank Nifty trend.

Watchlist:

• Axis Bank: ₹1,140 crucial support level; watch NPA trajectory

• ICICI Bank: Earnings next week; strong retail franchise in focus

• Kotak Bank: Monitor asset quality commentary and NIM trend

Check This:

• Axis Bank Stock Price
• ICICI Bank Stock Price
• Kotak Bank Stock Price