Are Axis Bank latest results good or bad?

Axis Bank's latest financial results for the quarter ended September 2025 reveal a mixed operational performance characterized by declining profitability despite stable interest income. The bank reported a net profit of ₹5,557.51 crores, reflecting a year-on-year decline of 24.98%, indicating a concerning trend in profit erosion. This decline is compounded by a sequential drop in net profit over the past two quarters, raising questions about the bank's ability to sustain its earnings momentum.
Interest earned showed a modest year-on-year growth of 2.24%, reaching ₹32,309.77 crores, although this growth is less robust compared to previous periods. The net interest income, which is crucial for banks, stood at ₹14,338.30 crores, indicating only a slight sequential increase of 1.62%. This stagnation in core banking income, alongside rising interest expenses of ₹17,971.47 crores, has pressured margins, as evidenced by an operating profit before provisions of ₹11,138.49 crores, down 8.80% from the previous quarter.

The bank's return on equity (ROE) was recorded at 14.15%, which, while still respectable, shows a decline from previous quarters. This decline in ROE, coupled with the bank's elevated valuation at a P/E ratio of 13.96 times trailing earnings, raises concerns about whether the current valuation is justified given the recent profit trajectory.

Despite these challenges, Axis Bank's balance sheet remains strong, with advances growing by 8.20% year-on-year, and deposits increasing by 9.73%. The bank's asset quality metrics, with net NPA at 0.45% and gross NPA at 1.57%, indicate manageable levels of asset quality, though they are not best-in-class.

Institutional confidence appears to be mixed, as total institutional holdings remain high at 84.99%, but foreign institutional investors have reduced their stake, suggesting differing views on the bank's near-term prospects.

In summary, Axis Bank's latest results highlight significant operational challenges, particularly in profitability, while maintaining a solid balance sheet and institutional backing. The company saw an adjustment in its evaluation, reflecting the complexities of its current financial landscape. Investors may need to closely monitor upcoming quarters to gauge whether the recent performance trends will stabilize or continue to decline.