Axis Bank's shares dropped by over 5% during intraday trading on January 17, reaching a 52-week low of ₹982.50. The decline followed the announcement of the bank’s Q3 FY25 earnings, which fell short of market expectations.

 

Financial Performance Highlights

 

Net Profit: The bank reported a modest 3.83% YoY increase in net profit to ₹6,304 crore, down 9% sequentially from ₹6,917.57 crore in Q2 FY25.

 

Net Interest Income (NII): NII grew by 9% YoY to ₹13,606 crore, though the net interest margin (NIM) shrank to 3.93%, compared to 4.01% in the same period last year and 3.99% in the previous quarter.

 

Interest Income: Total interest income rose 11% YoY to ₹30,954 crore, while interest expenses grew by 12% to ₹17,348 crore.

 

 

Rising Slippages and Asset Quality Concerns

 

Asset Quality: The gross NPA ratio slightly increased to 1.46% from 1.44% in Q2 FY25, while net NPAs edged up to 0.35% from 0.34%.

 

Slippages: Fresh slippages surged to ₹5,432 crore, marking a 46% YoY increase. Retail loans contributed ₹4,923 crore, followed by ₹215 crore from SMEs and ₹294 crore from wholesale business.

 

 

Market Reaction

 

The stock is now nearly 27% below its July 2024 peak of ₹1,339.55 and has declined over 4% in the past year. January alone saw a 6% drop, extending its losing streak to four consecutive months.

 

CEO’s Outlook

 

Axis Bank MD & CEO Amitabh Chaudhry expressed optimism despite challenges. He highlighted the bank’s focus on digital transformation, rural banking, sustainability, and inclusivity, emphasizing its readiness to support India’s growth aspirations.

 

While the management remains confident about the future, the market’s reaction reflects investor concerns about slowing profit growth, rising slippages, and narrowing margins.