Axis Bank shares surge 4% despite fall in profit in Q2; here is what top investment firms say

Shares of Axis Bank, the country’s leading private sector lender, rose as much as 4.04% to hit an intraday high of ₹1,216.90 apiece on the National Stock Exchange (NSE) on Thursday, October 16, a day after it reported its September quarter earnings. On the BSE, Axis Bank shares rose as much as 4.16% to hit an intraday high of ₹1,217.65.

With today’s gain, Axis Bank stock was the top gainer in the 30-share SENSEX and NIFTY50 index.

Axis Bank post market hours on Wednesday reported a net profit of ₹5,090 crore in the second quarter of the current financial year, marking a decline of 26% from ₹6,918 crore in the same period last year.

The decline in profit came on the back of higher provisioning for bad loans, as its provisions jumped 61% to ₹3,547 crore from ₹2,204 crore in the year-ago period.

Axis Bank’s net interest income (NII), or the difference between interest earned on loans and expended on deposits, rose nearly 2% to ₹13,744 crore from ₹13,483 crore.

The Mumbai-based lender’s asset quality remained largely stable in the July-September period, as its gross non-performing assets (NPA), as a percentage of total advances, came in at 1.46% compared with 1.44% in the same period last year.

Its net NPA rose by 10 basis points to 0.44%.

In absolute terms, gross NPAs came in at ₹17,308 crore compared with ₹15,466 crore in the year-ago period.

“This quarter, we continued to push ourselves as an institution to deliver meaningful progress. From enhancing digital safety to expanding access to credit and empowering entrepreneurs, our innovations are designed to serve real needs with precision and scale,” said Amitabh Chaudhry, MD & CEO, Axis Bank.

“We believe true transformation is not just about technology; it’s about relevance, strength, and responsibility. As we move forward, our focus remains on building a bank that is agile, inclusive, and an all-weather franchise. One that leads with purpose in a rapidly evolving world,” Chaudhry added.

Here is what global investment firms say on Axis Bank’s Q2 earnings:

CLSA in a note said that after adjusting for a one-off, its profit before tax was better than estimates, driven by better net interest income and pre-provision operating profit.

CLSA believes that the second quarter was a quarter of change in trend, as loan and deposit growth picked up and slippages came in lower than in the past few quarters.

Bernstein said that Axis Bank’s growth metrics showed sequential improvement, and asset quality witnessed a sharp recovery as slippages declined meaningfully quarter-on-quarter (QoQ).

“While credit costs remain elevated – albeit lower than the previous quarter – this is largely due to one-off provisions on agri advances, which could reverse in subsequent quarters. Encouragingly, underlying trends such as lower slippages and improving card additions suggest that asset quality stress may be nearing a bottom,” Bernstein noted.

HSBC in a note said that Axis Bank reported very strong results in loan growth, margins and asset quality, but one-off provisions were a disappointment.

However, it noted that earnings inflection was visible, and it raised FY26-28 estimated earnings per share (EPS) by 2.7-5.3% on stronger growth and lower credit costs.

Jefferies said that Axis Bank’s earnings were better than estimates, with key positives like better net interest margins (NIMs), a pickup in loan and deposit growth by 12% and 11%, respectively, and moderation in slippages and core credit costs.

JPMorgan in a note said that the earnings miss in the second quarter was led by higher provisions on crop loans. But added that its asset quality is improving, with gross non-performing assets and slippages declining. JPMorgan added that its net interest margins (NIMs) remain stable while corporate loans are driving the overall loan growth.

As of 9:51 am, Axis Bank shares traded 2.71% higher at ₹1,200.60, outperforming the NIFTY50 index, which was up 0.5%.