Axis Bank Drops 5% After Flat Q4 Net Profit of Rs.7,118 Crore

On Friday, Axis Bank's share price was down by 5 percent on NSE, touching a day’s low of Rs. 1,152.10 per share after it reported financial results for Q4FY25 and FY25, with the bank's standalone net profit for Q4FY25 being Rs. 7,117 crore, reflecting a 13 percent quarter-on-quarter (QoQ) increase but remaining largely flat year-on-year (YoY) compared to Rs. 7,130 crore in Q4FY24. For FY25, Axis Bank posted a net profit of Rs. 26,373 crore, marking a 6 percent YoY growth.

The bank’s net interest income (NII) rose by 6 percent YoY in Q4FY25 to Rs. 13,811 crore, up from Rs. 13,089 crore in the same quarter last year. The net interest margin (NIM) improved by 4 basis points QoQ to 3.97 percent in Q4FY25, with the full-year NIM at 3.98 percent, indicating stable and efficient interest income generation. This improvement was driven by a 10 percent QoQ increase in current account and savings account (CASA) deposits and a 7 percent rise in total deposits to Rs. 11,72,952 crore, reflecting its strong customer base.

Fee income, a non-interest revenue stream, grew by 12 percent YoY and 16 percent QoQ in Q4FY25 to Rs. 6,338 crore. Axis Bank’s core operating profit rose 5 percent QoQ and 11 percent YoY in Q4FY25 to Rs. 10,575 crore. For FY25, the core operating profit increased 13 percent YoY to Rs. 42,104 crore. The cost-to-assets ratio improved by 9 basis points YoY to 2.46 percent for the full year, reflecting cost management.

The bank’s advances grew 8 percent YoY and 3 percent QoQ to Rs. 10,40,811 crores in Q4FY25, with retail loans expanding 7 percent YoY, accounting for 60 percent of the net advances. Small Business Banking (SBB) and Small & Medium Enterprises (SME) segments showed healthy growth, with SME loans up 14 percent YoY to Rs. 1,18,521 crores, and the mid-corporate book growing 10 percent YoY. Corporate loans also grew 8 percent YoY, demonstrating a balanced loan book across segments.

Deposit growth remained strong, with total deposits up 10 percent YoY on a month-end balance (MEB) basis and 9 percent on a quarterly average balance (QAB) basis. Term deposits increased 14 percent YoY, current accounts grew 6 percent YoY, and savings accounts rose 3 percent YoY. The CASA ratio stood at 41 percent on an MEB basis and 38 percent on a QAB basis, indicating a healthy low-cost deposit base.

Axis Bank’s capital position remained solid, with a capital adequacy ratio (CAR) of 17.07 percent and a common equity tier 1 (CET1) ratio of 14.67 percent. The bank achieved net accretion to CET1 of 93 basis points in FY25 and 6 basis points in Q4FY25, ensuring a strong capital buffer to support future growth.

The bank continued to consolidate its leadership in digital payments and merchant acquiring businesses. It held approximately 32 percent market share by UPI volumes as a payer payment service provider (PSP) and about 19 percent market share in the merchant acquiring terminal space.

Asset quality remained stable, with the gross non-performing asset (NPA) ratio at 1.28 percent in Q4FY25 and the net NPA ratio at 0.33 percent, supported by risk management and adequate provisioning. The bank’s provision coverage ratio stood robustly at 75 percent as of FY25, showing resilience against credit risks. The standalone return on assets (ROA) at 1.74 percent and return on equity (ROE) at 16.52 percent for FY25.

In summary, Axis Bank’s Q4FY25 and FY25 results demonstrate steady growth in net interest income, fee income, and core operating profit, supported by strong deposit and loan growth across retail, SME, and corporate segments. The bank maintained healthy asset quality and strengthened its leadership in digital payments and merchant acquiring businesses.