AXISBANK - Axis Bank

📊 NSE: AXISBANK 🏢 Banks - Private Sector 📅 Last Updated: 12/13/2025 18:48

💰 Financial Performance

Revenue Growth by Segment

Axis Finance PAT grew 18% YoY to INR 385 Cr in H1FY26. Axis AMC PAT grew 11% YoY to INR 271 Cr. Axis Securities H1FY26 revenue stood at INR 729 Cr with a PAT of INR 175 Cr. Retail advances grew 6% YoY, while MSME/SBB/Mid-Corporate segments grew at a 27% CAGR from Sep'21 to Sep'25.

Geographic Revenue Split

Domestic operations are conducted through 5,976 branches across 3,238 centers. Overseas corporate loans represent 10% (INR 34,973 Cr) of the corporate loan book as of Sep'25, down from 12% in Mar-22.

Profitability Margins

Net Interest Margin (NIM) stood at 3.73% for Q2FY26. Operating Profit Margin was 2.53% and Consolidated Return on Equity (ROE) was 11.51% for H1FY26.

EBITDA Margin

Operating Profit Margin of 2.53% for Q2FY26. Pre-provision profit for Axis Finance grew 23% YoY to INR 548 Cr in H1FY26.

Capital Expenditure

The bank expanded its physical network by 399 branches YoY, reaching 5,976 domestic branches. Future capital expenditure is focused on digital transformation and branch ramping to target retail customers.

Credit Rating & Borrowing

CRISIL and CARE Ratings have reaffirmed a 'Stable' outlook. Tier 1 capital ratio was 15.1% and overall Capital Adequacy Ratio (CAR) was 17.1% as of March 31, 2025. Cost of funds declined by 24 basis points QoQ in Q2FY26.

⚙️ Operational Drivers

Raw Materials

Customer Deposits (CASA and Term Deposits) and Borrowings represent the primary 'raw materials' for banking operations. CASA ratio stood at 40% as of Sep'25.

Import Sources

Primarily sourced from the domestic Indian market (54 million customers). The bank also accesses international capital markets, evidenced by a US$600m Sustainable AT1 Bond.

Key Suppliers

54 million individual and corporate depositors provide the capital base. No single supplier dependency is noted due to the granular retail deposit base.

Capacity Expansion

Current capacity includes 5,976 domestic branches and 13,177 ATMs/cash recyclers. The bank added 399 branches and 77 Business Correspondent Banking Outlets (BCBOs) in the last 12 months.

Raw Material Costs

Cost of funds is the primary cost, which saw a 24 basis point QoQ decline in Q2FY26 due to proactive action on savings and term deposit rates.

Manufacturing Efficiency

Cost to Assets ratio was 2.38% for Q2FY26. The bank delivered positive operating jaws with expenses increasing only 3% YoY in H1FY26.

Logistics & Distribution

Distribution is achieved through 5,976 branches, 13,177 ATMs, and 1,786 Virtual Relationship Managers.

📈 Strategic Growth

Expected Growth Rate

12%

Growth Strategy

Growth will be achieved by scaling the MSME and Mid-Corporate segments (27% CAGR) and leveraging the 'One Axis' subsidiary ecosystem. Axis Finance (23% YoY asset growth) is being prepared for a future listing. The bank is also expanding its digital footprint, currently holding a 37% market share in UPI Payer PSP volumes to drive low-cost customer acquisition.

Products & Services

Savings and Current Accounts, Fixed Deposits, Credit Cards, Personal Loans, Home Loans, MSME Loans, Corporate Loans, Wealth Management, Mutual Funds, and Stock Broking.

Brand Portfolio

Axis Bank, Axis Finance, Axis AMC, Axis Securities, Axis Capital, Freecharge, Axis Trustee, A.Treds.

New Products/Services

Launched Axis Gold OD on UPI with Freecharge; planned go-live for Loan Against Property in mid-Q3FY26.

Market Expansion

Ramping up branch network to target retail customers; Microfinance (MFI) sourcing now live in 143 branches.

Market Share & Ranking

3rd largest private sector bank in India. 5.4% market share in advances, 5.0% in deposits, and 37% in UPI Payer PSP volumes.

Strategic Alliances

Partnership with NPCI for UPI services; association with Freecharge for digital lending products.

🌍 External Factors

Industry Trends

Rapid growth in MSME credit (8.4% industry market share for Axis) and a shift toward digital-first banking and UPI-linked credit products.

Competitive Landscape

Competes primarily with HDFC Bank, ICICI Bank, and State Bank of India in the retail and corporate segments.

Competitive Moat

Durable advantage through its status as the 3rd largest private bank, providing scale for a 40% CASA ratio and a dominant 37% UPI market share that creates high switching costs.

Macro Economic Sensitivity

Sensitive to RBI monetary policy; rate cuts and GST reductions are expected to improve liquidity and credit growth.

Consumer Behavior

Increasing consumer preference for digital transactions (UPI transactions grew 51% QoQ) and unsecured retail credit.

Geopolitical Risks

Minimal direct impact as 90% of the corporate loan book is domestic.

⚖️ Regulatory & Governance

Industry Regulations

Compliance with RBI Master Circulars on IRAC (Income Recognition, Asset Classification) and KYC norms. RBI advisory led to a one-time INR 1,231 Cr provision for crop loans.

Environmental Compliance

Issued a US$600m Sustainable AT1 Bond; recognized for 'Best Sustainability-linked Bond'.

Taxation Policy Impact

Subject to standard Indian corporate tax rates; fiscal policy impacts include GST rate reductions on services.

Legal Contingencies

RBI issued a caution letter (Oct 2025) regarding KYC lapses in an old account. The bank made an additional one-time standard asset provision of INR 1,231 Cr for discontinued crop loan variants following an RBI inspection.

⚠️ Risk Analysis

Key Uncertainties

Potential deterioration in asset quality in unsecured retail loans; regulatory penalties for operational lapses (KYC); and technological risks related to data breaches.