Axis Bank is set to release its first quarter results for financial year 2026 today. Analysts are expecting pressure on margins and subdued profitability despite steady operational performance and loan growth..

Anand Rathi expects Axis Bank’s profit to dip sequentially

Anand Rathi expects Axis Bank’s net profit (PAT) to come in at Rs 6,678.3 crore, marking a 6.2 per cent quarter-on-quarter decline. However, on a year-on-year basis, the profit is likely to rise by 10.7 per cent, helped by lower credit costs and strong operating income. The brokerage sees net interest income (NII) growing 5.7 per cent YoY to Rs 14,212 crore and pre-provision operating profit (PPOP) rising 11.9 per cent to Rs 11,031 crore.

NII and PPOP likely to decline, says Incred Equities

Incred Equities paints a more cautious picture, projecting a sequential decline in profit and operating performance. It expects Axis Bank to report PAT of Rs 6,100 crore in Q1FY26, down 14.8 per cent QoQ but slightly higher by 0.5 per cent YoY. NII is estimated at Rs 13,500 crore, down 2 per cent sequentially.

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The brokerage attributes the subdued numbers to continued pressure on net interest margins (NIMs), which are expected to contract to 3.80 per cent from 3.97 per cent in the previous quarter—a 17 basis point dip. PPOP is likely to fall 6.4 per cent QoQ to Rs 10,100 crore.

Despite near-term challenges, Incred Equities noted that Axis Bank is better positioned than peers, thanks to its high-yield loan mix and strong retail and SME segments. “Margins are likely to bottom out in Q2FY26, making Q1 crucial to assess the outlook for the rest of the year,” it said.

Margins under pressure; NIM may fall to 3.83 per cent: Motilal Oswal 

Motilal Oswal Financial Services (MOFSL) expects Axis Bank to post PAT of Rs 5,972 crore, reflecting a sharp 16.1 per cent drop QoQ and a 1 per cent decline YoY. While the bank’s PPOP is likely to grow 5.3 per cent YoY to Rs 10,637 crore, the sequential decline of 1.1 per cent and a steep rise in provisions could drag down the bottom line.

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MOFSL estimates provisions to rise to Rs 2,650 crore from Rs 1,360 crore in Q4FY25. “Axis Bank is likely to witness elevated slippages in Q1, particularly due to seasonal stress in the agri segment and a conservative provisioning approach,” the report said.

The brokerage also expects margin pressure to continue, with NIM seen falling to 3.83 per cent in Q1FY26 from 3.97 per cent in the previous quarter. NII is expected to grow modestly by 1.5 per cent YoY to Rs 13,647 crore but to decline 1.2 per cent QoQ.

Motilal Oswal expects loan growth to pick up in FY26

MOFSL noted that loan growth is expected to improve to 11 per cent YoY in FY26, up from 7.8 per cent in FY25, while deposit growth in Q1 is pegged at 12.5 per cent YoY. Gross NPA is estimated at 1.4 per cent, while Net NPA may remain steady at 0.4 per cent.

While the asset quality is broadly stable, analysts remain watchful of the unsecured retail loan segment, where stress remains elevated.

Axis Bank- A look at Q4FY25

Axis Bank reported net profit of Rs 7,117 crore

In its previous quarter (Q4FY25), Axis Bank posted a net profit of Rs 7,117 crore. The bank’s net interest income (NII) for the quarter stood at Rs 13,811 crore, registering a growth of 6 per cent compared to the same quarter last year. The net interest margin (NIM) improved marginally to 3.97 per cent, up 4 basis points sequentially.

Core operating profit at Rs 10,575 crore in Q4FY25

Fee income grew strongly during the quarter, coming in at Rs 6,338 crore, up 12 per cent year-on-year and 16 per cent quarter-on-quarter. Retail fee income saw an impressive 22 per cent sequential jump, highlighting strong traction in the bank’s consumer-facing businesses. The core operating profit for the quarter stood at Rs 10,575 crore, while the total operating profit rose to Rs 10,752 crore, reflecting an 11 per cent year-on-year growth.

Axis Bank declares final dividend of Rs 1 per share for FY25

The bank’s asset quality continued to improve, with gross non-performing assets (GNPA) reducing to 1.28 per cent from 1.43 per cent a year ago. Net NPA stood at 0.33 per cent, remaining stable quarter-on-quarter. Axis Bank’s board also recommended a final dividend of Rs 1 per share for FY25.