Axis Bank is a big drag on the markets today, post its disappointing performance for Q3FY25.

A quick glance at its earnings:

Operating Profit and Net Profit

The Bank’s operating profit for the quarter grew 15% YOY to Rs10,534 crore while Net profit growth was muted at 4% at Rs.6304 crore and sequentially, it fell 9%.

Net Interest Income (NII) and Net Interest Margin (NIM)

Bank’s NII for the quarter grew 9% at Rs.13,606 crore while NIM was lower at 3.93% v/s 4.1% (YoY).

Other income

Other Income Fee income for Q3FY25 grew 6% to Rs.5,455 crore. Retail fees grew 5%; and constituted 71% of the Bank’s total fee income. Fees from Third Party Products grew 21%. The Corporate & Commercial banking fees together grew 7% . Overall, non-interest income (comprising of fee, trading and miscellaneous income) grew 8%.

Asset quality

There are clear signs of pressure. Gross NPA rose to 1.46% v/s 1.44% (QoQ) while Net NPA too rose but just a tad from 0.34% to 0.35%.

The bank reported gross slippages of Rs 5,400 crore, with net slippages adjusted for recoveries at Rs 2,217 crore. Retail slippages accounted for Rs 2,928 crore, while wholesale recorded negative slippages of Rs 761 crore.

The pressure on the banking sector due to higher bad loans in microfinance and unsecured portfolio is now forcing banks to make higher provisions. Axis Bank’s provisions and contingencies, or funds kept aside for potential bad loans, more than doubled to Rs.2156 crore.

The stock is among the top five losers; from its opening of Rs.1006.95, the stock slipped to hit a new 52-week low at Rs.974.45 where it continues to trade.