Axis Bank is expected to report a strong performance for the first quarter of the financial year, with analysts projecting a nearly 22% year-on-year increase in standalone net profit, largely driven by a sharp decline in provisions. According to Bloomberg consensus estimates, the bank's profit is likely to rise to Rs 7,073.15 crore from Rs 5,806.14 crore in the corresponding quarter last year. Net interest income (NII) is also expected to post healthy growth of 11.7% to Rs 15,146 crore, reflecting continued expansion in the bank's lending business despite a challenging interest rate environment.
While earnings are expected to improve, analysts anticipate continued pressure on the bank's core profitability due to narrowing net interest margins (NIMs). Bloomberg estimates suggest NIM may decline to 3.5% from 3.8% a year ago as the bank's loan mix increasingly shifts towards lower-yielding corporate lending. Higher wholesale funding costs and slower growth in higher-yield retail loans are also expected to weigh on margins. Operating profit is projected at Rs 11,515.16 crore, while provisions are likely to decline nearly 40% year-on-year to Rs 2,374 crore, providing significant support to overall profitability.
Asset quality is expected to remain a key focus during the earnings announcement, with analysts forecasting a modest deterioration on a sequential basis. Gross non-performing assets (GNPA) are estimated to rise to 1.37% from 1.23% in the previous quarter, while net non-performing assets (NNPA) are likely to increase to 0.40% from 0.37%. Although seasonal factors could result in higher slippages during the quarter, most brokerages believe core credit costs will remain under control. Investors will closely monitor management's outlook on asset quality, retail lending recovery and the trajectory of credit costs in the coming quarters.
Also Read: MCX Gold Drops 0.58% to Rs 1,41,370 Per 10 Grams
Brokerages remain broadly optimistic about Axis Bank's business momentum despite the expected margin pressure. Nomura expects NIM to contract by around nine basis points sequentially and forecasts credit costs of nearly 70 basis points. Citi believes credit growth will continue to outpace the industry, supported by corporate, SME and small business lending, although retail loan disbursements may recover only gradually. Investec and Kotak Institutional Equities also expect healthy loan and deposit growth, while highlighting that corporate lending and retail portfolio slippages will remain important areas to watch. DAM Capital and Antique Stock Broking expect margin pressure to persist, but believe lower provisions and stable credit costs will continue to support earnings growth.
The management's commentary is expected to be the primary focus for investors following the results, particularly regarding margin recovery, loan growth, retail lending trends and asset quality. Analysts will also seek updates on funding costs, FCNR deposits, operating expenses and the bank's return on equity outlook. While Axis Bank is expected to deliver another quarter of strong profit growth, market participants will assess whether the bank can sustain its earnings momentum amid margin compression and evolving credit quality trends, making the upcoming quarterly results an important indicator of its performance for the remainder of the financial year.
Also Read: Today's Gold Price Update: Latest 24K And 22K Rates In Major Indian Cities Revealed