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Informist, Friday, Apr. 24, 2026

 

By Kabir Sharma

 

MUMBAI - Axis Bank is expected to report a largely steady performance for the March quarter, led by robust loan growth and stable asset quality, although pressure on net interest margins is expected weigh on profitability, according to brokerages tracking the bank.

 

The private sector bank is expected to report a net profit of INR 69.36 billion, down nearly 3% on year and almost unchanged from the previous quarter. The net interest income of the bank is likely to rise nearly 7% on year to INR 147.19 billion in the reporting quarter. 

 

The highest estimate for the lender's net profit is INR 76.76 billion by JM Financial Institutional Securities, and the lowest is INR 66.27 billion by ICICI Securities Ltd. The highest estimate for net interest income is INR 150 billion by SMIFS Ltd. and the lowest is INR 144.97 billion by Motilal Oswal Financial Services Ltd.

Kotak Institutional Equities expects loan growth of about 18% year-on-year, indicating a strong recovery in credit demand, while Motilal Oswal Financial Services pegs growth at a relatively moderate 15.3%. On a sequential basis, most brokerages estimate loan growth in mid-single digits, though YES Securities expects growth to be closer to 3.5% due to an "idiosyncratic" trajectory.

 

According to provisional data released earlier this month, Axis Bank Ltd.'s gross advances were up 18.4% on year to INR 12.44 trillion, while the total deposits rose nearly 14% to INR 13.36 trillion as on Mar. 31. 

 

Strong credit growth is expected to support net interest income, with SMIFS estimating an 8.5% on year and a 4.8% sequential increase. Fee income is also expected to remain healthy, although treasury income may come under pressure due to mark to market losses in the month of March on account of yields going up in the wake of the US-Iran war. The lender's net interest income was up 5% on year at INR 142.87 billion in the December quarter. 

 

Deposit growth is seen at around 12% on year, broadly in line with industry trends. On a sequential basis, deposit growth is seen slightly lagging but remaining healthy at around 6% quarter-on-quarter, brokerages said.

 

Most brokerages expect net interest margin to decline sequentially by 6–10 basis points, primarily due to the transmission of earlier repo rate cuts. Nomura and Motilal Oswal Financial Services attribute the expected contraction to repo-linked loan repricing, partially offset by term deposit repricing and a reduction in cost of funds. Prabhudas Lilladher estimates NIM to fall about 6 bps to 3.59%, while Kotak Institutional Equities sees a sharper 10 bps decline to around 3.5%.

 

Equirus, however, expects margins to remain largely flat sequentially. In contrast, YES Securities expects a slight uptick in NIMs driven by improving yields on advances outpacing deposit costs. The bank's net interest margin slipped to 3.64% in the December quarter from 3.93% in the year-ago period and was also down by 9 basis points on quarter.

Motilal Oswal and Nomura expect a decline in slippages, aided by the absence of seasonal stress from the agricultural portfolio. SMIFS estimates credit costs at around 80 basis points. Kotak Institutional Equities expects slippages of INR 50 billion, or 1.8% of loans, largely driven by retail segment, with credit costs at around 120 bps.

 

YES Securities also expects sequential moderation in slippages but flags that provisions could rise quarter-on-quarter, possibly due to prudent provisioning policies. Fresh slippages increased 10% on year to INR 60.07 billion in the December quarter and were up 5% sequentially from INR 57 billion. The bank's provision coverage ratio stood at 70% as of Dec. 31, unchanged from the trailing quarter but lower than 76% a year ago.

 

Axis Bank's gross non-performing asset ratio declined to 1.40% as of Dec. 31 from 1.46% both a quarter ago and a year ago. On a net basis, however, the non-performing asset ratio in Oct-Dec edged up to 0.42% from 0.35% a year ago, though it improved from 0.44% at the end of September.

 

Liquidity coverage ratio will be a key metric to watch, with brokerages highlighting the need to track any movement from the 116% level reported in the previous quarter. Management commentary on loan growth sustainability, margin trajectory, deposit mobilisation, and asset quality outlook will be closely tracked by investors.

 

Of 21 brokerage reports on the bank available with Informist, 20 have a 'buy' rating on the stock with an average target price of INR 1,423 per share, over 5% higher than the current market price. One brokerage has a 'hold' recommendation with an average target price of INR 1,000 per share.

 

The bank is scheduled to declare its earnings on Saturday. Shares of the bank ened the day at INR 1,365.90, 0.3% lower over Thursday. The shares have risen almost 8% since the bank declared earnings for the December quarter. 

 

Following are the March quarter earnings estimates for Axis Bank from 13 brokerages in descending order of the estimate of net profit in INR billion:

 

BROKERAGE NAME	NET INTEREST INCOME	NET PROFIT
JM Financial Institutional Securities Pvt Ltd	145.68	76.76
Emkay Global Financial Services Ltd	146.99	71.11
Anand Rathi Share and Stock Brokers Ltd	148.18	70.68
Nomura Equity Research	147.00	70.10
SMIFS Ltd	150.00	70.00
Equirus Securities Pvt Ltd	146.31	68.74
Kotak Securities Ltd	146.57	68.72
Prabhudas Lilladher Pvt Ltd	148.46	68.51
Motilal Oswal Financial Services Ltd	144.97	68.33
Elara Securities (India) Pvt Ltd	147.60	67.60
Nuvama Wealth Management Ltd	147.20	67.40
YES Securities (India) Ltd	147.90	67.40
ICICI Securities Ltd	146.64	66.27
Average	147.19	69.36

 

End

 

Edited by Vandana Hingorani

 

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