Axis Bank Q2 Results FY27: Net Profit Jumps 37.6% to ₹7,003 Crore, NII Beats Estimates and Asset Quality Improves
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Axis Bank reported a 37.6% year-on-year increase in net profit to ₹7,003.3 crore for the second quarter of the financial year 2026-27 (Q2 FY27). However, the private sector lender’s profit fell short of market expectations. The bank’s net interest income (NII) increased 11.8% to ₹15,371.4 crore, exceeding analysts’ estimates. Asset quality also improved during the quarter, with lower gross and net non-performing asset ratios.
According to a CNBC-TV18 poll, analysts had expected Axis Bank to report a net profit of ₹7,132 crore, representing growth of 40% year-on-year. The reported profit was around 1.8% below the estimate. However, net interest income exceeded the estimated ₹14,970 crore by approximately 2.7%, reflecting healthy growth in the bank’s core lending income.
Axis Bank reported a net interest margin (NIM) of 3.36% for the July-September quarter. Excluding the impact of Foreign Currency Non-Resident (FCNR-B) deposits, the NIM stood at 3.47%. The bank raised ₹1,01,800 crore under the FCNR(B) scheme. Of this amount, ₹43,800 crore was backed by advances from the bank’s international branches, while ₹44,900 crore was backed by standby letters of credit.
The bank’s operating profit increased 6% year-on-year to ₹11,083 crore, while core operating profit rose 11% to ₹10,998 crore. Other income declined 1% to ₹6,531 crore. However, fee income increased 6% to ₹6,381 crore, supporting the bank’s overall income performance.
Retail fees grew 7% sequentially and 4% year-on-year, accounting for 70% of the bank’s total fee income. Fees from corporate and commercial banking together increased 10% year-on-year to ₹1,943 crore. Trading income stood at ₹85 crore, while miscellaneous income was ₹65 crore. Total non-interest income, including fees, trading and miscellaneous income, amounted to ₹6,531 crore during Q2 FY27.
Axis Bank reported provisions and contingencies of ₹1,694 crore for the quarter, including specific loan-loss provisions of ₹1,564 crore. Despite these provisions, the bank’s asset quality improved compared with both the previous quarter and the corresponding period last year.
The gross non-performing asset (GNPA) ratio declined to 1.16% as of September 30, 2026, compared with 1.28% in the June 2026 quarter and 1.46% a year earlier. The net NPA ratio also improved to 0.35%, down from 0.39% in the preceding quarter and 0.44% in September 2025.
Gross loan slippages declined to ₹4,762 crore from ₹5,566 crore in the previous quarter and ₹5,696 crore in the year-ago period. The bank’s annualised net credit cost stood at 0.45%, declining by 28 basis points year-on-year and 18 basis points sequentially. The provision coverage ratio remained unchanged at 70%, compared with both the preceding quarter and the corresponding quarter last year.
The bank also reported strong growth in its loan portfolio. Advances increased 23% year-on-year to ₹13.74 lakh crore as of September 30, 2026, while growing 9% sequentially. Retail loans rose 16% year-on-year to ₹7.40 lakh crore, accounting for 54% of the bank’s net advances. Small and medium enterprise (SME) loans increased 25% to ₹1.65 lakh crore, while corporate loans grew 34% year-on-year.
Axis Bank’s total deposits increased 21% year-on-year and 6% sequentially to ₹14.52 lakh crore at the end of September 2026. Term deposits grew 27% year-on-year, while current account deposits increased 7% and savings account deposits rose 12%. The current account and savings account (CASA) ratio stood at 36%. The bank’s cost of funds also declined by 8 basis points year-on-year.
The bank maintained a strong capital position, with its capital adequacy ratio at 16.27% as of September 30, 2026. The Common Equity Tier 1 (CET-1) ratio stood at 14.61%. Axis Bank said it had added 23 basis points to its CET-1 ratio during the first half of FY27. In addition, the lender held extra provisions of ₹8,006 crore beyond those reflected in its reported capital adequacy ratio. These provisions provided an additional capital cushion equivalent to approximately 49 basis points.
Commenting on the results, Amitabh Chaudhry, Managing Director and CEO of Axis Bank, said the bank continued to focus on digital payments, secure banking, artificial intelligence-driven innovation and strategic partnerships. These initiatives are aimed at strengthening customer offerings and improving banking services.
In the stock market, Axis Bank shares closed 0.16% higher at ₹1,290 on Friday ahead of the quarterly earnings announcement. The stock has gained 1.2% so far in 2026, outperforming the Nifty 50 index, which has declined 11.5% over the same period. The bank’s market capitalisation stood at approximately ₹4.02 lakh crore.
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