Axis Bank shares fell to their lowest level in weeks after quarterly profit missed analysts’ forecasts, with higher provisions offsetting stronger net interest income and improving asset quality.
Axis Bank shares fell sharply on Monday after the lender’s September-quarter profit came in below market expectations, even though the bank still delivered healthy year-on-year growth and stronger core income.
The stock dropped as much as 5% in early trading and was the biggest drag on the Nifty Bank index. By 10:39 a.m., it was changing hands at about Rs 1,238.90, down 4%. The move marked the steepest one-day decline in the share price since September 24 and pushed it to its lowest level since October 5.
According to LSEG data, analysts had expected Axis Bank to post a standalone net profit of Rs 7,124 crore for the quarter ended September 30. The lender reported Rs 7,003 crore, up about 38% from Rs 5,090 crore a year earlier, but still short of forecasts. Broader weakness in banking shares added to the pressure, with HDFC Bank down 2.2% and ICICI Bank off 0.9%.
The results themselves showed a business that remained broadly resilient. Moneycontrol reported that Axis Bank’s net interest income rose 19% year on year to Rs 12,315 crore, while net interest margin stood at 4.11%. The bank’s gross non-performing asset ratio improved to 1.73% from 2.5% a year earlier, suggesting asset quality continued to strengthen.
Other reports, including NDTV Profit, the Indian Express and Mint, said the bank’s quarterly provisioning rose to Rs 815 crore from Rs 550 crore a year earlier, which weighed on earnings. Total income climbed to Rs 31,660 crore from Rs 24,094 crore in the same period last year. Managing director and chief executive Amitabh Chaudhry said the performance was strong despite a volatile global geopolitical backdrop, according to those reports.
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