Shares of Axis Bank soared 4% in the early hours of trade to hit an intraday high of ₹1,216.90 today, despite recording a 26% decline in net profit on a year-on-year basis. 

The loss in net profits was due to the one-time provisioning of ₹1231 crore, following an RBI inspection related to two discontinued crop loan variants. Yet, analysts and investors have focused on the otherwise strong performance of the private bank. 

The private lender's total income rose 1% to Rs 37,595 crore in the past quarter.  

Axis Bank reported a 2% rise in net interest income (NII) YoY to Rs 13,744 from last year's Rs 13,483 crore. The bank’s operating profit for the quarter fell 3% to Rs 10,413 crore on a YoY basis. The net interest margin (NIM) during the quarter stood at 3.73%, declining from 3.8% in the previous quarter and 3.99% in the year-ago quarter, as a result of Reserve Bank of India's total rate cuts of 100 basis points this year.

Fee income rose 10% YoY to Rs 6,037 crore in Q2FY2026. Retail fees too jumped 10% and contributed 71% to the Bank’s total fee income. 

In terms of asset quality, gross NPA and net NPA levels of the quarter in review reduced to 1.46% and 0.44% respectively, as against 1.57% and 0.45% recorded in the first quarter of FY2026.

Motilal Oswal has maintained a "Neutral" stance, stating in its report that net earnings were impacted by the one-time standard provision. “Asset quality improved sequentially as gross NPA/net NPA ratios improved and slippages moderated QoQ, driven by a sequential decline in both core and technical slippages. Business growth has gained traction, with deposits expected to grow at a healthy rate, while the bank aims to outperform systemic credit growth by 300 bps CAGR over the medium term.”