Axis Bank Q1 Results Preview: Margin Pressure To Persist, Slippages Seen Elevated

Axis Bank Ltd. is set to announce its June quarter results on Thursday with analysts expecting mixed performance on account of pressure on margins, elevated slippages, and a seasonal uptick in operating costs.

According to a poll by Bloomberg, India's third largest private sector bank is likely to report standalone profit after tax of Rs 6,375.77 crore, up over 5% on year. The bank's bottomline was Rs 7,117.5 crore a quarter ago.

Axis Bank Q1 FY26 Estimates (Standalone, YoY)

• Net Profit seen up over 5% at Rs 6,375.77 crore.

• NII seen at Rs 13,970 crore, down 4%

• NIM seen at 3.81%, lower than 3.97% (QoQ).

According to Yes Securities, sequential loan growth is expected to hover around 1%, slightly ahead of industry trends. However, yield on advances is seen falling more than the cost of deposits, leading to a sequential contraction in net interest margins, Systematix Institutional Equities said.

“We are building loan growth of 7% yoy (flat qoq). We are building NIM to decline 20bps qoq (~3.5%) qoq to factor the impact of the rate cut cycle,” Kotak Institutional Equities said.

The private lender's NIM is seen at 3.81% during April-June, lower than 3.97% a quarter ago. Net interest income of the bank is also expected at Rs 13,970 crore, down 4% on year, according to a poll by Bloomberg.

Elevated slippages are a common theme in most estimates. Systematix said the spike will likely be driven by seasonal agricultural slippages. Motilal Oswal Financial Services has flagged stringent provisioning policies.

Provisions are also expected to rise sequentially across the board, partly due to the provision reversals seen in Q4FY25, making the on quarter comparison optically higher.

Provisions of the bank are seen at Rs 2,262.11 crore, higher than Rs 1,359 crore a quarter ago and Rs 2,039 crore a year ago.

“We expect slippages of Rs 60 billion or 2.3% of loans mostly led by retail and LLP of 90bps,” Kotak said..

Analysts has also pointed to seasonal factors weighing on fee income, with Yes Securities expecting fee income growth to lag behind credit growth and Systematix expects it to dip sequentially. However, the year-on-year comparison should remain positive.

On the cost side, operating expenses are likely to see a spike due to annual appraisals. Both Yes Securities and Systematix project higher employee costs, which may outpace business growth in the quarter. However, Motilal expects overall cost ratios to remain under control.

Investors will watch out for management commentary on margin outlook, asset quality trends, slippages, especially from the unsecured segment and deposit mobilisation.