April 27 (Reuters) - Axis Bank shares fell as much as 4.8% on Monday after the Indian lender's quarterly earnings declined due to lower treasury income and higher provisions, with a planned $2 billion equity fundraise adding to the pressure.
The stock, down 3.6% at 1,317 rupees as of 12:08 p.m. IST, was the top percentage loser on benchmark Nifty 50 and the Nifty Bank, which were up 0.6% and flat, respectively.
On Saturday, the country's third-largest private lender by market capitalisation posted a fourth-quarter net profit of 70.71 billion rupees ($750.6 million) against 71.18 billion rupees a year earlier. Analysts had expected a profit of 73.16 billion rupees, according to data compiled by LSEG.
Earnings visibility for Axis Bank is improving, aided by stable asset quality and moderating credit costs, ICICI Securities said in a note.
The bank's continued tilt toward wholesale lending may keep net interest margins "under pressure until mix normalisation plays out," the brokerage said.
Axis Bank's 19% loan growth in the fourth quarter outpaced HDFC Bank's 12% rise and ICICI Bank's 15.9% growth.
However, provisions and contingencies more than doubled due to a voluntary exercise and were not tied to any falling asset quality or other adverse concern, the lender said.
Axis Bank made a one-time provision of 20 billion rupees for macro risks, including potential stress from the Middle East conflict, though CLSA said the impact was effectively offset by a 21 billion rupee tax writeback linked to its Citibank deal.
"The bank took a 20 billion rupees provision given global macro uncertainty. While it seems to make the Street nervous, we would not read too much into it," CLSA said.
Axis Bank shares have risen 3.6% so far in 2026, while the Nifty Bank index is down 5.8%.
($1 = 94.1312 Indian rupees)
Reporting by Mridula Kumar and Vivek Kumar M in Bengaluru; Editing by Rashmi Aich, Sherry Jacob-Phillips and Mrigank Dhaniwala
Source: Reuters