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Created: 2025-07-17 15:23:28 UTC

🚨 Axis Bank Q1 FY26 Results: What’s Behind the Surprise Profit Drop? 🧵

Axis Bank reported a X% YoY fall in standalone net profit for Q1 FY26, coming in at ₹5,806 crore—missing analysts' expectations of ₹6,373 crore. But the story behind the numbers is deeper. Let’s break it down 👇

1️⃣ Bad Loan Provisions Surge:
Provisions for bad loans almost doubled to ₹3,948 crore. Gross NPAs rose to XXXX% (from XXXX% last quarter). Total gross slippages hit ₹8,200 crore—higher than ₹4,805 crore in Q4. Clearly, asset quality is under pressure.

2️⃣ The "Technical Impact" Explained:
Axis Bank took a one-time accounting adjustment called “technical slippages.”
👉 ₹614 crore of PAT wiped out due to loan reclassifications as NPAs.
💡 Importantly, ~80% of these loans are fully secured—so real risk is minimal.

3️⃣ Core Business Resilience:
Net Interest Income (NII): ₹13,560 crore (+1% YoY)
Net Interest Margin (NIM): XXX% (down from 4.05%)
Operating profit: ₹11,515 crore (+14% YoY)

Non-interest income up XX% YoY at ₹7,258 crore
Axis Bank’s operations remain fundamentally strong.

4️⃣ Diversification Mitigates Risks:
Non-interest income (fees, trading, digital services) cushioned the impact of loan provisions. Focus on fee-based revenue streams is helping Axis Bank stay balanced.

5️⃣ Capital Adequacy Stays Solid:

Capital Adequacy Ratio (CAR): XXXXX%

CET1 Ratio: XXXXX%
Deposit & Advance growth: 8-9% YoY
The bank’s capital buffers remain robust even amidst rising slippages.

6️⃣ Market Response:
Despite operational strength, Axis Bank’s shares slipped XXX% post-results, closing at ₹1,159.85. Investors are wary about the rise in NPAs, even if technically classified.
7️⃣ Final Takeaway:
While profit dipped, the “technical slippages” are more of an accounting formality than a deterioration in loan book quality. Still, rising unsecured and microfinance stress areas warrant close monitoring in the coming quarters.

📊 In Summary:

Profit dip = technical + rising bad loans

Core operations = resilient

Long-term outlook = steady, but Q2 will be critical to watch actual asset quality trends.
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