Axis Bank net profit improves in Q1, but asset quality still a concern

It is taking pro­active steps to address potential stress, though net NPA at 2.04% hasn't changed much sequentially

New management setting the stage for strong growth tends to increase expectations from a company, and all the more when a competitor delivers  best-in-many quarter results. Consequently, expectations were high from Axis Bank, but the June quarter (Q1) seemed to be a bit of a let-down, mainly on the asset quality front.

Net profit at Rs 1,370 crore which grew by 95 per cent in Q1 year-on-year didn’t match the Street’s expectations (Rs 1,860 crore), largely because of elevated provisioning. Net interest income (NII) increased by 13 per cent year-on-year in Q1, though major support was on account of non-interest income,