Axis Bank Q1 Results Review - Soft Quarter Does Not Change Structural Thesis: Yes Securities

Yes Securities Report

Axis Bank Ltd.'s gross non-performing asset additions amounted to Rs 47.93 billion for Q1 FY25, translating to an annualized slippage ratio of 1.97% for the quarter. Gross NPA additions had amounted to Rs 34.71 billion during Q4 FY24. The retail book contributed Rs 42.29 billion to slippages in the quarter compared with Rs 31.1 billion in Q4. 32% of total slippages were linked accounts which were standard when classified or upgraded during the quarter.

There has been deterioration in asset quality across some parts of the book, such as retail unsecured but it is not a of concern as of now as internal risk benchmarks have not been breached.

Reported net credit cost amounted to 97 bps for the quarter but management does not regard this as indicative of the credit cost expected for full year FY25. About 30 bps of this is attributable to timing difference for recoveries from the wholesale book, which would eventually happen.

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