Shares of Axis Bank Ltd declined by 3.32% to ₹1,167 in Friday’s session after the private lender posted flat Q4FY25 net profit despite improved operating metrics and lower credit costs.
The lender reported a net profit of ₹7,117.5 crore, marginally down from ₹7,123 crore in the same quarter last year. However, the result was ahead of the ET NOW poll estimate of ₹6,681 crore.
Net interest income (NII) rose by 5.5% YoY to ₹13,810.5 crore compared to ₹13,089 crore in Q4FY24. The Net Interest Margin (NIM) improved 4 basis points QoQ to 3.97%, indicating efficient cost of funds and pricing strength.
Axis Bank also reported an 11% YoY increase in core operating profit, which stood at ₹10,575 crore. On the asset quality front, the Gross NPA (GNPA) ratio improved to 1.28% (down 15 bps YoY and 18 bps QoQ), while Net NPA (NNPA) dropped to 0.33%, down 2 bps sequentially.
Brokerage View
Jefferies maintained a Buy rating with a target price of ₹1,450, stating that the Q4 profit was in line with estimates. The brokerage noted that lower credit costs supported earnings, though treasury income remained weak.
Jefferies highlighted that Axis Bank lags peers on growth and asset quality but maintains stronger NIMs. It believes that with improving liquidity and growth outlook, the bank has the potential to narrow the 25–35% valuation discount to its peers.
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