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Axis Bank shares slip nearly 6% after Q1 profit but margin concerns
Even as June quarter net profit rose 22.2% year on year to ₹7,632.31 crore, net interest margin narrowed to 3.46% from 3.80% a year earlier.
Axis Bank shares fell nearly 6% on 20 July after investors weighed concerns about shrinking net interest margins and softer asset quality against the bank's June quarter profit growth, according to LiveMint Markets citing Reuters. The lender reported a 22.23% year on year increase in consolidated net profit to ₹7,632.31 crore for the June quarter, helped by lower provisions. On a standalone basis, net profit rose 23% to ₹7,114 crore. Net interest income increased 8% to ₹14,646 crore, supported by 19% growth in advances, but net interest margin declined to 3.46% from 3.80% a year ago, and from 3.73% in the March quarter, reflecting pressure on lending spreads. The bank said it believes NIM has likely bottomed out in the current cycle and expects margins to improve, and noted that inflows under the FCNR(B) deposit scheme could support margins by improving liquidity and reducing high cost liabilities.
Asset quality showed a slight weakening, with the gross non performing asset ratio edging up to 1.28% at end June from 1.23% in the prior quarter. Brokerage coverage cited in the article included Nuvama Institutional Equities retaining a Buy rating and expecting NIM recovery during H2FY27, alongside lower funding and credit costs.