Are Axis Bank Ltd. latest results good or bad?

Axis Bank Ltd.'s latest financial results for the December quarter present a mixed picture. The bank reported a net profit of ₹6,489.57 crores, reflecting a year-on-year growth of 2.95%, which is a slight decline from the previous year’s growth rate. Net interest income reached ₹14,286.56 crores, marking a sequential growth of 3.94% and a year-on-year increase of 5.00%. However, the net interest margin contracted to 3.64%, down from 3.73% in the previous quarter, indicating challenges in maintaining profitability amidst competitive pressures.
The bank's provisions and contingencies saw a significant reduction to ₹2,245.92 crores from ₹3,547.04 crores in the prior quarter, which positively impacted profitability. Despite this, asset quality metrics showed a marginal deterioration, with gross non-performing assets (GNPA) rising to 1.46% from 1.40% in the previous quarter. The provision coverage ratio also declined to 70%, down from 71%, suggesting a need for close monitoring of asset quality trends.

The bank's total income grew to ₹38,500.06 crores, up 2.41% sequentially and 4.26% year-on-year, supported by robust interest earnings. The advance-to-deposit ratio remained strong at 90.66%, although the CASA ratio fell to 39%, reflecting challenges in low-cost deposit mobilization.

Overall, Axis Bank's results indicate a recovery in profitability driven by lower provisions, but the ongoing margin compression and slight deterioration in asset quality highlight areas of concern. The company saw an adjustment in its evaluation, reflecting these operational trends and challenges.