Axis Bank's Q1FY27 net profit rose 22.5% YoY to Rs 7,113.92 crore, driven by a sharp decline in provisions. Net interest income grew 8%, but higher expenses and lower other income kept core operating profit growth modest at 1.3%.
Axis Bank's standalone net profit rose 22.5 per cent year-on-year to Rs 7,113.92 crore in Q1FY27, supported by a sharp decline in provisions and contingencies, even as pressure on other income and a rise in interest expenses moderated the growth in core operating profit.
Net interest income (NII) increased 8 per cent to Rs 14,646.10 crore, while operating profit rose a modest 1.3 per cent to Rs 11,659.10 crore, according to the bank's exchange filing on Saturday.
Profitability Driven by Lower Provisions
The sharp rise in net profit was primarily driven by lower provisions. Provisions and contingencies fell 43.7 per cent year-on-year to Rs 2,222.54 crore in the quarter, from Rs 3,947.66 crore in Q1FY26. This helped profit before tax rise 24.8 per cent to Rs 9,436.56 crore, despite higher tax expenses during the quarter.
Core Earnings Performance
The growth in NII was supported by an increase in interest earned, which rose 9.4 per cent year-on-year to Rs 33,985.63 crore. However, interest expended increased at a faster pace of 10.5 per cent to Rs 19,339.53 crore, limiting the expansion in net interest income.
The bank's operating profit growth remained subdued as the rise in operating expenses and decline in other income offset the increase in core interest income. Other income fell 7.2 per cent year-on-year to Rs 6,735.42 crore, while operating expenses increased 4.5 per cent to Rs 9,722.42 crore.
The decline in other income was led by lower non-interest revenue during the quarter. Employee costs declined to Rs 3,058 crore from Rs 3,261.75 crore in the year-ago period, but other operating expenses rose to Rs 6,664.42 crore from Rs 6,040.90 crore, keeping overall cost pressures elevated. As a result, total expenditure excluding provisions increased 8.4 per cent year-on-year to Rs 29,061.95 crore.
Asset Quality and Market Summary
Asset quality remained relatively stable, with gross NPA at 1.28 per cent and net NPA at 0.39 per cent as of June 30, 2026. The bank's return on assets stood at 1.51 per cent, compared with 1.47 per cent a year earlier.
Axis Bank's Q1 performance reflected a strong bottom-line recovery led by lower credit provisions, while core earnings growth remained more moderate amid higher funding costs and weaker non-interest income.
On Friday, shares of Axis Bank settled at Rs 1,329.40, up nearly 2 per cent on the National Stock Exchange. (ANI)
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