Axis Bank Shares Plunge Post Q1 Results, Profit Falls Amid Asset Quality Concerns

Key Highlights:

Axis Bank shares fall over 7 percent after Q1 results miss expectations.

Net profit declines due to technical impact and policy changes.

GNPA ratio rises to 1.57 percent, gross slippages nearly double.

Mumbai: Axis Bank shares witnessed a sharp decline on Friday, plummeting over 7 percent on the BSE to Rs 1,073.95 after the bank reported a disappointing set of June quarter results. On the NSE, the stock dropped 6.36 percent to Rs 1,086 per share. It was the biggest loser among Sensex and Nifty constituents during morning trade. The broader market was also in the red, with the BSE Sensex falling by 551.93 points to 81,707.31 and the NSE Nifty dropping 164.65 points to 24,943.60.

Weak Q1 Results Disappoint Street

Axis Bank reported a 3 percent year-on-year decline in consolidated net profit for Q1FY26, totaling Rs 6,243.72 crore. On a standalone basis, net profit dropped to Rs 5,806 crore from Rs 6,034 crore a year ago and fell sharply from Rs 7,117 crore in the preceding quarter. Analysts from JM Financial noted a 4 percent YoY decline in profit after tax (PAT), reflecting weak core income growth and a Rs 614 crore one-time technical impact that hurt earnings. HDFC Securities' Devarsh Vakil cited falling asset quality as a key concern, also reflected in the 4.8 percent decline in Axis Bank’s GDR to USD 64.30.

Asset Quality Under Pressure

The bank’s asset quality deteriorated notably during the quarter. Gross non-performing assets (GNPA) rose to 1.57 percent, up from 1.28 percent in the previous quarter, largely due to changes in its asset recognition and loan upgrade policies. Gross slippages surged to Rs 8,200 crore from Rs 4,805 crore. However, adjusted for technical impacts, the figure stood at Rs 5,491 crore. CEO Amitabh Chaudhry said the bank is taking a more prudent approach to NPAs and one-time settlements, which may minimize long-term economic losses.