
Shares of Axis Bank fell nearly 4% on January 17, trading at ₹1,003.90 during the early hours, following the announcement of its Q3 FY25 financial results. The private lender reported a mixed set of earnings, with moderate loan growth, increased provisions, and a decline in net interest margins (NIM), which weighed on investor sentiment.
Key Financial Highlights:
- Net Profit: Axis Bank reported a 3.83% year-on-year (YoY) increase in net profit to ₹6,304 crore for Q3 FY25, compared to ₹6,071 crore in the year-ago period. However, on a sequential basis, the net profit dropped 9% from ₹6,918 crore in Q2 FY25.
- Net Interest Income (NII): The bank’s NII, the difference between interest earned and interest paid, grew 9% YoY to ₹13,606 crore from ₹12,532 crore a year earlier. This was supported by an 11% YoY rise in interest income to ₹30,954 crore.
- Net Interest Margin (NIM): The NIM narrowed to 3.93%, the lowest in 10 quarters, from 4.01% in the same quarter last year and 3.99% in the preceding quarter. This indicates pressure on profitability.
- Loan Growth: Axis Bank’s loans grew by 9% YoY during the quarter, slower than the 11% growth reported in Q2 FY25.
- Deposits: Total deposits also increased by 9% YoY, reflecting steady but subdued growth.
- Provisions and Contingencies: Funds set aside for potential bad loans more than doubled to ₹2,156 crore YoY, highlighting challenges in segments like microfinance and unsecured portfolios.
- Gross and Net NPAs: The gross non-performing asset (NPA) ratio rose marginally to 1.46% from 1.44% in the previous quarter, while the net NPA ratio increased to 0.35% from 0.34%.
Stock Performance:
Axis Bank shares opened lower following the results and were trading at ₹1,003.90, down 3.29% from the previous close of ₹1,038. The stock has a 52-week high of ₹1,339.65 and a low of ₹995.70. The market capitalization of Axis Bank stands at ₹3.11 lakh crore, with a P/E ratio of 11.16 and a dividend yield of 0.10%.