AXISBANK

Hits 52-Week High, Margin Trends in Focus

reported a strong Q3FY26 performance, with net profit rising 3% YoY to ₹6,490 crore, beating analyst estimates. The stock surged over 5% to a 52-week high of ₹1,333.20, driven by robust growth in net interest income (NII) and core operating metrics. However, margin compression remains a concern, with net interest margin (NIM) declining sequentially due to an unfavorable loan mix. Profit and Core Operating Metrics - Net profit: ₹6,490 crore, up 3% YoY, ahead of consensus. - NII: ₹14,286 crore, up 5% YoY, driven by loan book expansion. - Core pre-provision operating profit: ₹1,235 crore, up 7% YoY. - Profit beat supported by ₹130 crore write-back of standard asset provisions. Margins and Loan Mix - NIM declined 9 bps QoQ to 3.64%, continuing a downward trend from 4.1% in Q1FY25. - Margin pressure attributed to unfavorable loan mix, with higher share of low-yield segments. - Management expects margin normalization over medium term, aided by deposit repricing and mix improvement. Provisions and Cost Management - Held ₹430 crore in provisions for new labor code implementation. - Operating expenses remained stable, with cost discipline supporting profitability. - Credit costs well-contained, reflecting stable asset quality. Strategic Outlook and Growth Ambitions - Axis aims to grow 300 bps faster than industry over next 3–5 years. - Focus areas include retail lending, digital expansion, and fee income diversification. - Management remains optimistic about industry-wide credit growth, supported by macro tailwinds. Valuation and Investor Sentiment - Stock hit ₹1,333.20, a new 52-week high, post results. - Analysts view Axis as well-positioned, but margin trajectory will be closely watched. - Sustained NII growth and operating leverage could support further re-rating.