Axis Bank reported a 38% rise in standalone net profit to ₹7,003 crore for the July to September quarter of FY27, but the stock fell about 4.5% to ₹1,231.50 on the NSE in morning trade on 19 October 2026. The private lender released its Q2 results on Saturday, 17 October, and reports said the numbers missed Street estimates.
Provisions fell sharply, asset quality improved and loans grew 23%. A narrower net interest margin and weaker trading income drew the market’s attention.
Axis Bank Q2 FY27 Results at a Glance
The profit growth came largely from lower provisions rather than from operating strength. Operating profit rose only 6%, while provisions and contingencies dropped 52% from a year earlier.
Axis Bank Q2 FY27 key numbers
| Metric | Q2 FY27 | Change |
|---|---|---|
| Standalone net profit | ₹7,003 crore | 38% YoY (from ₹5,089 crore) |
| Consolidated net profit | ₹7,704.67 crore | 39.4% YoY |
| Net interest income (NII) | ₹15,371 crore | 12% YoY |
| Net interest margin (NIM) | 3.36% | 3.73% a year earlier |
| Operating profit | ₹11,083 crore | 6% YoY |
| Core operating profit | ₹10,998 crore | 11% YoY |
| Provisions and contingencies | ₹1,694 crore | 52% lower YoY |
For the first half of FY27, the bank’s net profit rose 30% year on year to ₹14,117 crore, compared with ₹10,896 crore in the first half of FY26.
Why the Axis Bank Net Interest Margin Fell
The net interest margin was 3.36% in the quarter, compared with 3.73% a year earlier. Excluding the impact of FCNR(B) deposits, the margin stood at 3.47%. FCNR(B) stands for foreign currency non-resident (bank) deposits, which are held in foreign currency by non-resident Indians.
The bank reported FCNR(B) deposits of ₹1.018 trillion, which includes deposits backed by advances from its international branches and standby letters of credit. Subrat Mohanty, Executive Director at Axis Bank, said the bank used part of the funds in the quarter to retire or replace high-cost deposits. He added that there are several levers on both the cost of funds and the asset mix.
The pressure was not limited to Axis Bank. HDFC Bank’s NIM also eased by 8 basis points from the previous quarter, and a Business Standard report said FCNR(B) inflows weighed on private banks’ margins in Q2.
Asset Quality and Provisions Improve
Asset quality indicators improved on both a yearly and a quarterly basis. The bank said gross and net NPAs, slippages and credit costs all improved over the year-ago quarter and the previous quarter.
- The gross NPA ratio was 1.16% at 30 September 2026, down from 1.28% in the previous quarter and 1.46% a year earlier.
- The net NPA ratio was 0.35%, compared with 0.39% in the previous quarter and 0.44% a year earlier.
- Gross slippages were ₹4,762 crore, against ₹5,696 crore a year earlier and ₹5,566 crore in the previous quarter.
- Annualised credit cost fell to 0.45%, down 28 basis points year on year.
- The provision coverage ratio, excluding prudential write-offs, was 70%.
During the quarter the bank wrote off NPAs worth ₹2,729 crore, while recoveries and upgrades stood at ₹2,380 crore. About 33% of gross slippages came from linked accounts of borrowers who were standard when classified or were upgraded in the same quarter.
Loan and Deposit Growth at Axis Bank
Advances grew 23% year on year and 9% from the previous quarter to ₹13.74 trillion. Retail loans rose 16% to ₹7.4 trillion and made up 54% of net advances. Corporate advances grew 34% to ₹4.69 trillion, and loans to small and medium enterprises (SMEs) increased 25% to ₹1.65 trillion.
Deposits increased 21% to ₹14.52 trillion. Term deposits rose 27% year on year on a month-end basis, which pulled the current and savings account (CASA) ratio down to 36% from 40% a year earlier. The capital adequacy ratio was 16.27% and the common equity tier-1 (CET-1) ratio was 14.61% at the end of September.
Management said the bank has not yet revised retail term deposit rates.
Other Income Slips as Trading Gains Shrink
Other income slipped 1% year on year to ₹6,531 crore. Trading income fell to ₹85 crore from ₹498 crore a year earlier, while fee income, the largest part of other income, rose 6% to ₹6,381 crore.
Asked about the insurance regulator’s proposed overhaul of distribution rules, Mohanty said the proposal is still a consultation paper. He said the bank has several ways to find alternative fee income and to limit any impact, including changes in product mix, volumes and talks with insurance partners.
Axis Bank Share Price Reaction on 19 October
Axis Bank shares declined 4.5% to ₹1,231.50 on the NSE in morning trade as investors assessed the results. Axis Bank, HDFC Bank, Infosys and Bajaj Finserv were among the top losers on the Sensex at the open, and the Nifty Private Bank index fell the most among sectoral indices. The Nifty PSU Bank index rose about 1.9% at the open and led the gainers.
The previous session had ended higher, with the Sensex at 74,729.27 and the Nifty at 23,146.15 on Friday.
Investors who track results-day moves on a stock trading app can compare the opening price with the previous close and the day’s volumes. Buying or selling bank shares needs a demat and trading account, and all price data in this report reflects trade at the time of writing rather than the closing level.
Leadership Appointments Announced With the Results
The board appointed Ananth Narayan, a former whole-time member of SEBI, as an additional independent director from 19 October 2026. It also appointed Rahul Shukla as Group Head, Commercial and Bharat Banking.
The bank’s exchange filings remain the primary source for the full results, the investor presentation and any further disclosures on margins and deposits.
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