Axis Bank Share Price Rises 5% After Strong Q3 Results: What Investors need to know

Axis Bank shares are up around 5% today, and the rally is clearly linked to the bank’s Q3FY26 results. A closer look at the numbers shows why the market reacted so positively. Profits improved sharply, asset quality strengthened further, and growth stayed steady across key segments.

Profits Jumped Sharply in Just One Quarter

The biggest trigger for today’s move is the jump in profits. Axis Bank’s profit after tax rose from ₹5,090 crore in Q2FY26 to ₹6,490 crore in Q3FY26. That is an increase of over 28% on a quarter on quarter basis and  3% on YoY basis.

Bank’s Net interest income was 14,287cr, healthy growth of 5% YOY and 4% QoQ.

Net interest margin stood at 3.64% for the quarter. While margins have seen some pressure across the banking sector, stability at this level is seen as a positive for a large private bank.

Core operating profit also improved meaningfully, rising from ₹9,915 crore to ₹10,815 crore over the same period. For the market, this signals improving earnings momentum, which often leads to a sharp stock reaction.

Loans and Deposits Continued to Grow in Balance

Axis Bank’s balance sheet growth remained healthy and well-supported.

Total loans increased from ₹10.15 lakh crore last year to ₹11.59 lakh crore as of December 2025, growth of 14% on YoY basis. At the same time, total deposits rose from ₹10.96 lakh crore to ₹12.61 lakh crore, growth of 15% on YoY basis.

This balance is important. Strong loan growth without deposit support can raise risk, but Axis Bank is growing both sides together.

The bank’s CASA deposits stood at ₹4.93 lakh crore, keeping the CASA ratio stable at 39%. A strong CASA base helps the bank control funding costs and protect margins.

Asset Quality Improved Further

Improving asset quality was another key positive from the results. Gross NPAs declined from 1.46% to 1.40%, while net NPAs increased slightly to 0.42%. In absolute terms, the bank continues to reduce stress even as its loan book grows.

Net credit cost for the quarter stood at ₹2,307 crore, translating to an annualised credit cost of 0.76%, lower than last year. For investors, falling NPAs and controlled credit costs reduce uncertainty around future earnings.

Fee Income Added a Strong Support Layer

Non-interest income continued to strengthen the earnings profile. Fee income rose from ₹5,455 crore last year to ₹6,100 crore in Q3FY26. Retail and transaction-linked fees formed the bulk of this income, making it more predictable and recurring.

Overall non-interest income for the quarter stood at ₹6,226 crore, helping reduce dependence on interest income alone.

Digital and Payments Franchise Remained Strong

Axis Bank’s digital leadership also stood out in the results. During the quarter, the bank added around 1 million new credit cards. The mobile app has a monthly active user of over 15 million. 

In payments, Axis Bank continues to be the largest UPI payer bank, with close to 39% market share by volume. Digital transactions accounted for nearly all individual customer transactions, strengthening fee income and customer engagement.

Capital Position Remained Comfortable

Axis Bank’s balance sheet strength provided additional comfort to investors. The bank’s capital adequacy ratio stood at 16.55%, with a CET-1 ratio of 14.50%. In addition, Axis Bank holds extra provisioning buffers of over ₹6,200 crore, which are not counted in capital ratios.

This gives the bank enough room to grow without worrying about immediate capital raising or dilution.

Subsidiaries Added to Overall Earnings Quality

Axis Bank’s subsidiaries also supported the positive narrative. Domestic subsidiaries reported a combined profit of ₹1,490 crore in the first nine months of FY26. Axis Finance, Axis AMC, Axis Capital, and Axis Securities all delivered double-digit profit growth during this period. This adds depth to the group’s earnings and supports a stronger long-term valuation.

The Big Picture

Axis Bank’s 5% jump today reflects a clear improvement across multiple fronts. Profits rose sharply quarter-on-quarter, asset quality improved further, growth remained steady, and the balance sheet stayed strong. When these factors come together in one quarter, the market tends to respond quickly. Today’s rally is essentially the market pricing in better earnings visibility and lower risk, based on what the latest numbers are showing.

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