Axis Bank shares rally over 5% after Q2 results

Brokerages cut earnings estimates, see limited downside in stock

- NIKITA VASHISHT

Axis Bank's shares rallied as much as 6.3 per cent intraday on Friday though it reported subdued results for the September quarter of 2024-25 (Q2FY25). The stock hit an intraday high of ₹1,203.7 per share on the BSE, before settling 5.6 per cent higher at ₹1,195.7 apiece, as analysts see limited valuation downside in the stock from current levels. By comparison, the benchmark BSE Sensex closed 0.27 per cent higher. Brokerages, however, have cut their earnings forecast by up to 5 per cent over FY25-27 to factor in Q2 results.

Q2 hits and misses

Axis Bank reported a mixed set of earnings in Q2FY25, according to analysts. Net profit, which beat estimates, was aided by a one-time tax provision reversal (of ₹550 crore) and stood at ₹6,918 crore compared to ₹5,864 crore in Q2FY24.

The lender's pace of loan growth slowed to 11 per cent year-on-year (Y-o-Y) in Q2FY25, compared to 14 per cent Y-o-Y growth in Q1. Quarter-on-quarter (Q-o-Q), loans were up barely 2 per cent. Retail loans were up 2 per cent Q-o-Q, small and medium enterprises (SME) loans rose 6 per cent and corporate loans were flat.