1. At a Glance
Axis Bank is India’s 3rd largest private bank by assets but often the 1st in being underestimated. With ROE climbing to 16%, earnings of ₹28,000 Cr+, and a low P/E of 12.9, this banking ninja is silently building a monster balance sheet while the market stays obsessed with HDFC and ICICI.
2. Introduction with Hook
If HDFC is the Sachin of private banking and ICICI is the Virat, then Axis Bank is definitely the Rahul Dravid—reliable, understated, and quietly consistent. While the limelight hogs battle it out with flashy quarterlies, Axis has been compounding profits at 72% CAGR over 5 years (yes, you read that right). The EPS jumped from ₹1.78 in FY18 to ₹89.97 TTM, and it’s still trading at a discount to peers.
- Market cap: ₹3.6 lakh crore
- P/E: 12.9 (while ICICI and Kotak enjoy >19)
- FY25 Net Profit: ₹28,191 Cr
3. Business Model (WTF Do They Even Do?)
Axis Bank isn’t just about savings accounts and loan disbursals. It’s a full-service financial institution:
- Retail Banking: Home loans, personal loans, credit cards (4th largest issuer in India)
- Corporate Banking: Large cap lending, trade finance
- Treasury: FX, derivatives, debt, and investments
- Subsidiaries: Axis Capital (IB), Axis Mutual Fund, Axis Securities
They operate across segments: HNIs, SMEs, and corporates, with 4,700+ branches and international presence in Dubai, Singapore, Dhaka, and GIFT City.
4. Financials Overview
| Metric | FY23 | FY24 | FY25 |
|---|---|---|---|
| Revenue (₹ Cr) | 87,448 | 112,759 | 127,374 |
| Net Profit (₹ Cr) | 10,919 | 26,492 | 28,191 |
| EPS (₹) | 35.16 | 85.49 | 90.58 |
| ROE | 9% | 18% | 16% |
| Net NPA | Sub-1% | Sub-1% | Sub-1% (estimated) |
| CASA Ratio | 44%+ | 45% | 45%+ |
YoY growth is slowing post-Citi acquisition, but asset quality and operational strength remain.
5. Valuation
Let’s talk Fair Value, not fantasy.
Method 1: P/E Based Valuation
- Current EPS (TTM): ₹89.97
- Assignable P/E Range: 14x – 18x
- FV Range = ₹1,260 – ₹1,620
Method 2: P/B Based Valuation
- Book Value: ₹604
- Sector average P/B: 2x – 2.5x
- FV Range = ₹1,208 – ₹1,510
Final EduInvesting FV Range:
₹1,260 – ₹1,600 (Upside potential: 9% – 38%)
6. What’s Cooking – News, Triggers, Drama
- Q1FY26 Results: ₹5,806 Cr net profit (YoY decline, but margin recovery seen)
- Credit growth ~8%, Deposit growth ~9%
- Big event: Integration of Citi consumer biz in full swing. Cost synergies to unlock post FY26.
- Triggers to Watch:
- Credit offtake in retail
- Treasury performance
- SME NPAs (under lens)
- Capital raising via AT1 bonds
Also, SEBI is sniffing around for fair disclosure. Drama? Maybe.
7. Balance Sheet
| Particulars (₹ Cr) | FY23 | FY24 | FY25 |
|---|---|---|---|
| Deposits | 9,45,825 | 10,67,102 | 11,70,921 |
| Borrowings | 2,06,214 | 2,28,200 | 2,20,687 |
| Investments | 2,88,095 | 3,32,354 | 3,96,685 |
| Reserves | 1,29,166 | 1,56,406 | 1,86,616 |
| Total Assets | 13,44,418 | 15,18,239 | 16,56,963 |
Key Points:
- Reserves grew by ₹30,000 Cr in FY25
- Deposits +8.8% YoY
- Strong capital adequacy above regulatory norms
8. Cash Flow – Sab Number Game Hai
| Year | CFO (₹ Cr) | CFI (₹ Cr) | CFF (₹ Cr) | Net Cash Flow |
|---|---|---|---|---|
| FY23 | 22,075 | -32,351 | 6,641 | -3,636 |
| FY24 | -5,555 | -9,001 | 22,341 | 7,785 |
| FY25 | 44,384 | -51,178 | -7,000 | -13,794 |
Takeaway:
- Core ops cash flows bouncing in FY25
- Heavy CapEx & investment activity
- Net cash burn in FY25 due to investment phase post-Citi deal
9. Ratios – Sexy or Stressy?
| Metric | FY23 | FY24 | FY25 |
|---|---|---|---|
| ROE | 9% | 18% | 16% |
| ROCE | 7.1% | 8% | 8.2% (Est.) |
| Net Interest Margin (NIM) | ~3.6% | ~3.7% | ~3.5% |
| Cost to Income | 42% | 40% | 41% |
| Gross NPA | 2.0% | 1.9% | 1.8% |
| Net NPA | 0.4% | 0.36% | 0.35% |
Axis is showing off a hot ratio sheet, but that ROCE needs a gym subscription.
10. P&L Breakdown – Show Me the Money
| Metric (₹ Cr) | FY23 | FY24 | FY25 |
|---|---|---|---|
| Interest Income | 43,389 | 61,391 | 72,014 |
| Other Income | 18,349 | 25,230 | 29,958 |
| Total Income | 87,448 | 112,759 | 127,374 |
| Operating Profit | 13,418 | 11,333 | 9,943 |
| Net Profit | 10,919 | 26,492 | 28,191 |
Axis is heavily leveraged on “Other Income”—nearly 25%+ of total income. Reminder: not all of it is predictable.
11. Peer Comparison
| Bank | P/E | ROE | Net Profit (₹ Cr) | CMP/BV | CASA % |
|---|---|---|---|---|---|
| HDFC Bank | 21.5 | 14.5% | 70,792 | 2.94x | ~45% |
| ICICI Bank | 19.8 | 18% | 51,029 | 3.24x | ~45% |
| Kotak Bank | 19.5 | 15.4% | 22,091 | 2.74x | ~50% |
| Axis Bank | 12.9 | 16.3% | 28,191 | 1.92x | 44-45% |
So yeah, it’s the cheapest amongst the elites—just like that quiet IITian no one sees coming.
12. Miscellaneous – Shareholding, Promoters
- Promoter Holding: 8.18% (Low because UTI+LIC were original sponsors)
- FIIs: 43.94%
- DIIs: 40.87%
- Public: 6.99%
- No. of Shareholders: 9.35 lakh+
Low promoter stake, but high institutional faith—this bank has institutional swagger if not family pride.
13. EduInvesting Verdict™
Axis Bank is what happens when a bank decides to stop playing the sidekick and starts working out in the basement Rocky-style. Sure, it’s not the flashiest—EPS is volatile, other income dependence is real, and integration costs from the Citi deal will linger till FY26.
But look closer: rock-solid capital ratios, improving CASA, rational provisioning, a decent NIM band, and EPS growth that’s nothing short of steroidal.
No Buy/Sell advice from us—but if this was a Bollywood flick, Axis would be the dark horse hero that wins the final act in style.
Metadata
– Written by EduInvesting Analyst | 18 July 2025
– Tags: Axis Bank, Private Banking, Financials, Q1FY26, Valuation, Banking Sector, Citi Acquisition, PSU vs Private Bank
