Axis Bank Q4 Results: Should you buy, sell or hold?(REUTERS)AI Quick ReadAxis Bank Q4 Results: Shares of Axis Bank declined around 5% on Monday, April 27, after the lender reported a slight drop in fourth-quarter profit, impacted by higher provisions and trading losses. Investor sentiment remained weak despite stable core performance, as the bank built a sizeable contingency buffer amid ongoing geopolitical tensions in West Asia.
Net profit for the March quarter came in at ₹7,071 crore, marginally lower than ₹7,118 crore reported a year ago. A sharp rise in provisions weighed on earnings, with total provisions jumping 139% year-on-year to ₹3,522 crore from ₹1,359 crore.
What triggered the sharp fall in Axis Bank stock?
A significant portion of the provisioning— ₹2,001 crore—was a one-time buffer created to safeguard against potential stress in certain loan accounts due to geopolitical uncertainties. The bank clarified that this was a precautionary step and not indicative of any underlying deterioration in asset quality.
Managing Director Amitabh Chaudhry stated that the additional provision was prudent in nature, aimed at strengthening the balance sheet during uncertain times, and did not reflect adverse credit trends across the loan or investment portfolio.
Operationally, the bank reported a 7% decline in operating profit to ₹10,013 crore, down from ₹10,752 crore a year ago. This was primarily due to a ₹606 crore trading loss and elevated operating expenses, which offset a 5% rise in net interest income. Net interest margin (NIM) also narrowed to 3.62% from 3.97% in the same quarter last year.
For the full financial year FY26, net profit declined to ₹24,457 crore compared to ₹26,374 crore in FY25, reflecting the impact of higher costs and provisioning.
On the business front, the bank continued to see strong growth. Advances rose 19% year-on-year to ₹12.34 lakh crore, with retail loans contributing 55% of the total book, while secured loans accounted for around 73%. Deposits grew 14% year-on-year to ₹13.36 lakh crore, although the bank acknowledged the need to narrow the gap between credit and deposit growth.
Asset quality metrics showed improvement during the quarter. Gross NPA ratio declined to 1.23% from 1.40% in the previous quarter, while net NPA ratio eased to 0.37% from 0.42%. Gross slippages stood at ₹4,709 crore, lower than ₹6,007 crore in the December quarter and ₹4,805 crore a year ago. The bank also wrote off NPAs worth ₹3,096 crore during the quarter.
Additionally, the bank reported a tax write-back of ₹580 crore, providing some support to the bottom line.
On the capital front, the board recommended a final dividend of ₹1 per equity share (face value ₹2), translating into a 50% payout for FY26. It also approved plans to raise up to ₹20,000 crore through various routes, including qualified institutional placement and global depositary instruments. However, Chief Financial Officer Puneet Sharma clarified that there are no immediate plans to raise equity in the current financial year.
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