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Informist, Thursday, Jan. 22, 2026

 

By Divya Moolayattil

 

MUMBAI - Axis Bank Ltd. is expected to report a single-digit on-year decline in net profit for the December quarter due to pressure on its net interest margin and elevated operating expenses. This would mark the second consecutive quarter of an on-year decline in the bank's net profit. However, the net profit is expected to rise sequentially, supported by steady loan growth and lower provisions.

 

The lender is likely to report a net profit of nearly INR 60 billion, down nearly 6% on year but up 17% on quarter, according to the average of estimates from 13 brokerages. The highest estimate for Axis Bank's net profit for the December quarter is INR 67.43 billion by Nirmal Bang Equities Pvt. Ltd., while the lowest estimate is INR 50.65 billion by Kotak Securities Ltd.

 

The private sector bank's net interest income for the December quarter is likely to be INR 140.47 billion, up over 2% sequentially, according to the average of estimates from 13 brokerages. Estimates for the bank's net interest income range from a low of INR 138.6 billion by Prabhudas Lilladher Pvt. Ltd. to a high of INR 142.3 billion by Motilal Oswal Financial Services Ltd.

 

The lender's net interest margin for the December quarter is likely to fall around 7 basis points sequentially and 28 bps on year, according to the average of estimates from six brokerages. The bank's net interest margin was 3.73% in the September quarter, down from 3.80% in the June quarter. The bank's margin will reflect the drag from the repricing of repo-rate linked loans and a moderation in the growth of unsecured retail loans.

 

The lender expects the margin to bottom out in the March or June quarter as the rate cut cycle plays out. The lender expects its net interest margin will likely restore to 3.8% within 15 months to 18 months from the date of the last repo rate cut on the back of favourable factors such as the cut in the banks' cash reserve ratio requirement, asset mix improvement, and residual deposit repricing, Motilal Oswal said. 

 

The Mumbai-based bank's gross advances grew 14% on year to INR 11.71 trillion as of Dec. 31. The key drivers for this growth were loans to wholesale, small and medium enterprises, and granular retail segments, as well as the bank maintaining a calibrated stance on unsecured loans, brokerages said. The bank's total deposits were up 15% on year at INR 12.61 trillion for the reporting quarter and the bank's current account savings account deposits were up 13.9% on year at INR 4.9 trillion as of Dec. 31. This growth was led by term deposits, which grew 15.8% on year and 6% on quarter to INR 7.7 trillion. Loans and deposits of the bank grew higher than the industry average of 11% and 9.5% on year, respectively.

 

The bank's other income is expected to be INR 65.88 billion, up over 10% on year and only marginally up on quarter, according to the average of four estimates. But treasury income is likely to fall 19% sequentially due to hardening of average yields. The bank's operating expenses are estimated at INR 99.5 billion, up over 11% on year and around 3% on quarter.

 

The lender's slippages are expected to be INR 58 billion, up around 7% on year and nearly 2% on quarter, according to Nuvama Wealth Management Ltd. This rise is likely to be led by slippages in retail, limited liability partnerships, and agriculture loans. Axis Bank's gross non-performing asset ratio is likely to rise over 3 bps on year and on quarter to over 1.5% as on Dec. 31, as per the average of estimates from three brokerages.

 

The private sector bank's provisions for the December quarter are estimated at INR 23.9 billion, up nearly 11% on year and sharply down by nearly 33% on quarter, according to the average of four estimates. The sequential decline in provisions is likely due to a one-time provisioning in the September quarter, Mirae Asset Sharekhan Ltd. said in its pre-earnings report.  

 

Shares of Axis Bank ended marginally higher at INR 1,294.8 Thursday on the National Stock Exchange. Shares of the bank are up nearly 11% since its September quarter earnings were announced. Axis Bank will announce its December quarter earnings Monday.

 

Of the 14 brokerage reports on the bank available with Informist, 13 have a 'buy' or equivalent recommendation on the stock, with an average target price of INR 1,405 per share. This is over 8% higher than the current market price. Only one brokerage has a 'hold' recommendation with a target price of INR 1,180.

 

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

 

Brokerage	NII	Net Profit
Nirmal Bang Equities Pvt. Ltd.	141.16	67.43
Prabhudas Lilladher Pvt. Ltd.	138.60	62.81
Systematix Shares and Stocks (India) Ltd.	139.76	62.58
ICICI Securities Ltd.	139.72	61.21
Mirae Asset Sharekhan Ltd.	140.81	61.30
YES Securities (India) Ltd.	142.13	61.61
SMIFS Ltd.	139.00	60.00
Nuvama Wealth Management Ltd.	140.60	59.40
Emkay Global Financial Services Ltd.	142.20	59.83
Motilal Oswal Financial Services Ltd.	142.30	58.70
JM Financial Institutional Securities Pvt. Ltd.	140.51	55.54
Elara Securities (India) Pvt. Ltd.	139.39	53.00
Kotak Securities Ltd.	139.86	50.65
Average	140.46	59.54

 

End

 

Edited by Tanima Banerjee

 

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