Shares of Axis Bank, India's fourth-largest private sector lender, witnessed a notable uptick in early trading on Tuesday, January 6, climbing 1.50% to touch an intraday high of ₹1,304.60 on the National Stock Exchange (NSE). This surge followed the bank's release of its quarterly business update for the period ending December 2024 (Q3 FY25).
Robust Quarterly Performance Drives Momentum
The positive market sentiment stems directly from the strong operational numbers disclosed by the bank in a regulatory filing after market hours on Monday. Axis Bank reported a significant 14.1% year-on-year increase in its gross advances, which reached ₹11.71 lakh crore. This also represents a healthy sequential growth of 3.7% from the ₹11.28 lakh crore recorded at the end of the September 2024 quarter.
On the deposits front, the bank demonstrated equally impressive strength. Total deposits grew by 15% year-on-year to ₹12.61 lakh crore. Compared to the previous quarter, deposits saw a rise of 4.8%. A breakdown shows that both CASA (Current Account Savings Account) and term deposits expanded robustly, increasing by 13.9% and 15.8% respectively on an annual basis.
Stock Performance and Analyst Sentiment
The bullish business update propelled the Axis Bank stock to its highest level since July 2024. The scrip is now trading merely 2.6% below its all-time high of ₹1,339 per share. This marks a sharp recovery from the lows of August, with the stock closing three of the past four months positively and gaining nearly 22% in that period. For the calendar year 2025, Axis Bank shares ended with a solid gain of 19.3%, their best annual performance since 2022.
This optimism builds upon the bank's performance in the second quarter (Q2 FY25), where despite a one-time provision impact leading to a 26% drop in net profit, key operational metrics shone through. The bank reported:
- Better-than-expected Net Interest Income (NII) at ₹13,745 crore.
- A strong Net Interest Margin (NIM) of 3.73%, surpassing estimates.
- Improved asset quality, with Gross NPAs at 1.46% and Net NPAs at 0.44%.
Most brokerages maintained a constructive view post-Q2, considering the profit dip as a temporary setback due to specific provisions, while highlighting the underlying strength in core operations, loan growth, and balance sheet expansion.
Market Reaction and Outlook
By noon on Tuesday, Axis Bank shares were trading 0.72% higher at ₹1,295, outperforming a generally weak broader Indian equity market. The sustained upward trajectory indicates strong investor confidence in the bank's growth story, fueled by consistent advances and deposit accretion.
The latest Q3 business update reinforces the positive narrative, suggesting that the lender is on a steady path of balance sheet growth and operational efficiency. Investors are likely to watch closely for the full quarterly financial results to assess the translation of this business growth into profitability and return ratios.
