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Axis Bank Ltd

| Quarterly Financial Results Q3 FY 2025-26

BULLISH SENTIMENT

Report Source

⬤26th Jan 26

Summary : Axis Bank reports strong Q3 and 9M FY26 financial results with robust profit growth, stable asset quality, and healthy capital, despite new regulatory provisions.

Quarterly Report Analysis & Insights

Financial Disclosures

  1. Standalone Interest Expended: ₹17,987.84 Cr (Q3FY26), ₹52,717.28 Cr (9M FY26).
  2. Standalone Operating expenses: ₹9,636.52 Cr (Q3FY26), ₹28,895.77 Cr (9M FY26).
  3. Standalone Provisions (other than tax) and Contingencies (Net): ₹2,245.92 Cr (Q3FY26), ₹9,740.62 Cr (9M FY26).
  4. Consolidated Interest Expended: ₹18,785.12 Cr (Q3FY26), ₹54,995.28 Cr (9M FY26).
  5. Consolidated Operating expenses: ₹10,374.38 Cr (Q3FY26), ₹30,982.69 Cr (9M FY26).
  6. Consolidated Provisions (other than tax) and Contingencies (Net): ₹2,368.27 Cr (Q3FY26), ₹10,045.01 Cr (9M FY26).
  7. Recovery ratings assigned to Security Receipts (RR1+, RR1, RR2) with anticipated recovery percentages ranging from 90% to 537%.
  8. Standalone Interest earned: ₹32,274.40 Cr (Q3FY26), ₹94,308.14 Cr (9M FY26).
  9. Standalone Other Income: ₹6,225.66 Cr (Q3FY26), ₹20,108.30 Cr (9M FY26).
  10. Consolidated Interest earned: ₹33,709.17 Cr (Q3FY26), ₹98,367.25 Cr (9M FY26).
  11. Consolidated Other Income: ₹7,189.24 Cr (Q3FY26), ₹22,702.01 Cr (9M FY26).
  12. Standalone Total Assets: ₹17,52,171.47 Cr (Dec 31, 2025).
  13. Standalone Deposits: ₹12,60,785.88 Cr (Dec 31, 2025).
  14. Standalone Advances: ₹11,59,051.66 Cr (Dec 31, 2025).
  15. Standalone Capital Adequacy Ratio - Basel III: 16.55% (Dec 31, 2025).
  16. Standalone Gross NPAs: 1.40% (Dec 31, 2025); Net NPAs: 0.42% (Dec 31, 2025).
  17. Consolidated Total Assets: ₹18,08,479.76 Cr (Dec 31, 2025).
  18. Consolidated Deposits: ₹12,59,130.08 Cr (Dec 31, 2025).
  19. Consolidated Advances: ₹12,06,704.85 Cr (Dec 31, 2025).
  20. Both standalone and consolidated financial results are presented for the quarter and nine months ended December 31, 2025.

Corporate Overview

  1. Two subsidiaries are located outside India, with results converted to Indian GAAP.
  2. Provisioning for gratuity liability due to New Labour Codes: ₹25.44 crores (standalone) and ₹32.84 crores (consolidated) charged to P&L in Q3FY26.
  3. Additional one-time standard asset provision of ₹1,231 crores for two discontinued crop loan variants, to be written back upon recovery by March 31, 2028.
  4. The Bank has 10 subsidiaries, 2 step-down subsidiaries, and 1 associate.
  5. Other income includes profit/loss from investments, foreign exchange and derivative transactions, commission, fees from services, and selling third-party products.
  6. Digital Banking is presented as a sub-segment of the Retail Banking segment.
  7. The Board of Directors approved the unaudited standalone and consolidated financial results.
  8. Standalone Q3FY26 Revenue: Treasury (₹7,555.88 Cr), Corporate/Wholesale Banking (₹12,659.01 Cr), Retail Banking (₹36,858.35 Cr), Other Banking Business (₹1,110.09 Cr).
  9. Consolidated Q3FY26 Revenue: Treasury (₹8,281.18 Cr), Corporate/Wholesale Banking (₹13,534.95 Cr), Retail Banking (₹37,944.36 Cr), Other Banking Business (₹1,505.43 Cr).
  10. Allotted 22,02,400 and 77,12,365 equity shares under Employee Stock Option/Units Scheme during the quarter and nine months ended December 31, 2025.
  11. Projects under implementation at quarter-end totaled ₹25,416.01 crores across 976 accounts.

Risk Factors

  1. Regulatory changes impact gratuity provisioning.
  2. Recovering discontinued crop loans by 2028.
  3. Reliance on other auditors for subsidiaries.
  4. Potential market competition and economic slowdown.

Key Drivers

  1. Strong net profit and operating profit growth.
  2. Healthy capital adequacy ratio maintained.
  3. Stable asset quality, improving NPA ratios.
  4. Strategic focus on digital banking segment.

Auditor’s Report

  1. Unmodified review report on standalone financial results.
  2. Unmodified review report on consolidated financial results.
  3. Disclosures relating to consolidated Pillar 3 disclosures (leverage ratio, liquidity coverage ratio, NSFR) were not reviewed by the auditors.
  4. Interim financial results of certain subsidiaries (8 reviewed by other auditors, 4 not reviewed) and an associate were not material to the Group, and the conclusion is not modified.

Board Commentary

  1. Scheme of Demerger for Freecharge Payment Technologies Private Limited (FPTPL) approved by NCLT, transferring business to Freecharge Business and Technology Services Limited (FBTSL). No impact on consolidated financial results.
  2. Projects under implementation at the end of Q3FY26 totaled ₹25,416.01 crores across 976 accounts.

Corporate Governance

  1. Results recommended by the Audit Committee and approved by the Board of Directors.

Management Discussion & Analysis

Future Strategy

  1. Monitoring finalization of Central and State rules for New Labour Codes and adjusting estimates/provisions accordingly.
  2. Standard asset provision for discontinued crop loans will be written back upon recovery or closure by March 31, 2028.

Performance Drivers

  1. Standalone Net Profit after Tax for Q3FY26 increased to ₹6,489.57 Cr from ₹6,303.77 Cr in Q3FY25.
  2. Consolidated Net Profit after Tax for Q3FY26 increased to ₹7,044.42 Cr from ₹6,763.10 Cr in Q3FY25.
  3. Standalone Operating Profit (before Provisions & Contingencies) for Q3FY26 was ₹10,875.70 Cr.
  4. Consolidated Operating Profit (before Provisions & Contingencies) for Q3FY26 was ₹11,738.91 Cr.
  5. Standalone Return on Assets (annualized) % for Q3FY26 was 1.49%.

Risk Control Measures

  1. No stressed loans (NPA and SMA accounts) were acquired or transferred during the nine months ended December 31, 2025.
  2. No divergence in asset quality or NPA provisioning was identified in the FY25 annual inspection.

Critical Risks

  1. RBI guidelines on Pillar 3 disclosures (leverage ratio, liquidity coverage ratio, NSFR) under Basel III framework are available on the website but not subjected to audit or limited review.
  2. Preliminary assessment of financial impact from New Labour Codes on gratuity liability.