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Axis Bank reported mixed performance in Q4FY25 with improved asset quality but slower business growth.


Axis Bank reported mixed performance in Q4FY25 with improved asset quality but slower business growth.
Advances growth remained slower than industry at 8% YoY to ₹10,40,811 crores, though sequential rebound was witnessed (3% QoQ) which was driven by retail loans at 7% YoY (3% QoQ), SME at 14% YoY (4% QoQ). Deposit accretion remained strong at 10% YoY (7% QoQ) to ₹11,72,952 crores, led by term deposits up 14% YoY (5% QoQ). Focus on improving granularity and quality of deposit have enabled limiting increase in cost of funds.
Operationally, margins improved 4 bps QoQ to 3.97%, owing to focus on better yielding segments. Fee income growth remained healthy at 12% YoY with continued control on opex (up 6% YoY).
Asset quality improved with slippages declining to 1.85% in Q4FY25 vs 2.1% in Q3FY25. GNPA and NNPA ratio dipping 18 bps and 2 bps QoQ to 1.28% and 0.33%. Credit cost trend declined at ~50 bps, owing to reversal of ₹800 crore from security receipts. Management indicated stabilizing of stress in credit card segment, while personal loans is expected to take a few quarters to show improvement which was a change in earlier stance.
Deposit growth showed strong sequential traction, though loan growth remained below industry levels—sustainability of this momentum in Q1FY26 remains key. Margin impact from the recent rate cut is expected to be minimal, aided by a tightly matched asset-liability duration, though quarterly volatility could not be ruled out. Steep discount compared to private peers makes the lender a compelling opportunity.
Disclaimer – I ICICI Securities Ltd. ( I-Sec). Registered office of I-Sec is at ICICI Securities Ltd. - ICICI Venture House, Appasaheb Marathe Marg, Prabhadevi, Mumbai - 400 025, India, Tel No : 022 - 6807 7100. I-Sec is acting as a distributor to solicit bond related products. All disputes with respect to the distribution activity, would not have access to Exchange investor redressal forum or Arbitration mechanism. The contents herein above shall not be considered as an invitation or persuasion to trade or invest. I-Sec and affiliates accept no liabilities for any loss or damage of any kind arising out of any actions taken in reliance thereon. Investments in securities market are subject to market risks, read all the related documents carefully before investing. The contents herein mentioned are solely for informational and educational purpose.
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