Axis Bank Shares faced a sharp 3.5% drop after the release of its Q3 FY25 financial results, signaling investor concerns about the bank’s current performance.
The decline was driven by a combination of slower-than-expected growth in critical metrics such as net interest income (NII) and CASA (Current Account Savings Account) deposits. Despite a modest 4% rise in net profit, the market reacted negatively due to rising provisions for bad loans and increased slippages, which raised questions about asset quality.
Analysts also highlighted a reduced growth outlook for Axis Bank Shares, prompting downgrades from leading brokerage firms and further pressuring the stock price.
Contents
| Metric | Q3 FY25 | Q3 FY24 | Year-over-Year Change |
|---|---|---|---|
| Net Profit | ₹6,036 crore | ₹5,853 crore | +4% |
| Net Interest Income (NII) | ₹13,606 crore | ₹12,533 crore | +9% |
| Total Advances | ₹10,14,564 crore | ₹9,30,000 crore | +9% |
| Deposits | ₹10,95,882 crore | ₹9,70,000 crore | +13% |
| Gross Slippages | ₹5,432 crore | ₹3,715 crore | +46% |
| Provisions | ₹2,155 crore | ₹1,025 crore | +110% |
Slower Net Interest Income Growth
The Net Interest Income (NII) grew by 9% year-over-year to ₹13,606 crore, which is below industry expectations. Sequentially, the NII remained relatively flat, indicating challenges in expanding net interest margins.
Sluggish Credit Growth
Total advances increased by 9% year-over-year, reaching ₹10,14,564 crore. However, this growth is below the industry average of 11% for the quarter, suggesting a slowdown in the bank’s lending activities.
Increase in Slippages and Provisions
Gross slippages rose by 46% year-over-year to ₹5,432 crore, indicating a deterioration in asset quality. Consequently, provisions for bad loans more than doubled to ₹2,155 crore, impacting the net profit growth.
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FAQs
What was Axis Bank’s net profit in Q3 FY25?
The net profit for Q3 FY25 was ₹6,036 crore, a 4% increase from ₹5,853 crore in Q3 FY24.
How did the Net Interest Income (NII) perform in Q3 FY25?
The NII grew by 9% year-over-year to ₹13,606 crore but remained flat sequentially, indicating challenges in margin expansion.
What led to the increase in provisions during Q3 FY25?
The rise in gross slippages by 46% year-over-year necessitated higher provisions for bad loans, which more than doubled to ₹2,155 crore.
How did the market react to Axis Bank’s Q3 FY25 results?
The bank’s shares declined by 3.5% following the announcement, reflecting investor concerns over the financial performance.
What are the key challenges Axis Bank faces post-Q3 FY25?
The bank needs to address asset quality deterioration and stimulate credit growth to improve financial performance in future quarters.
Conclusion
Axis Bank Shares Q3 FY25 results highlight several challenges, including slower credit growth, increased slippages, and higher provisions. These factors have contributed to the decline in share price, reflecting investor concerns about the bank’s future performance. Addressing asset quality issues and revitalizing loan growth will be crucial for the bank in the upcoming quarters.
