Axis Bank's Mixed Bag: Profit Up, NPAs Rising
January 18, 2025, 11:03 am
Axis Bank recently reported its quarterly earnings, revealing a tale of two halves. On one side, net profit climbed 4% year-on-year, reaching ₹6,304 crore. This growth was buoyed by stable core income. However, the bank's bottom line took a hit, dropping 9% from the previous quarter. The culprit? A slowdown in other income streams.
The bank's advances and deposits each grew by 9% year-on-year, totaling ₹10.14 lakh crore and ₹10.95 lakh crore, respectively. Net interest income also followed suit, rising to ₹13,606 crore. Yet, the bank's net interest margin (NIM) slipped by 6 basis points to 3.93%. This margin is a crucial measure of profitability, and its decline raises eyebrows.
The darker cloud looming over this financial silver lining is the deterioration in asset quality. The gross non-performing asset (GNPA) ratio inched up to 1.46%, while the net NPA rose to 0.35%. Fresh slippages, or new bad loans, surged to ₹5,432 crore, up from ₹4,443 crore in the previous quarter. A staggering ₹4,900 crore of these slippages stemmed from the retail sector, particularly unsecured personal and agricultural loans.
The bank's management acknowledges the uncertainty in the asset quality cycle. External factors, such as tight liquidity and geopolitical risks, create a fog of unpredictability. The Indian economy's tepid growth adds to the complexity. The bank is keeping a close watch on its portfolio, ready to act as needed.
In the world of finance, stability is a coveted prize. Axis Bank's ability to grow profits amid rising NPAs is a testament to its resilience. However, the increasing bad loans cast a long shadow. Investors and analysts will be keenly observing how the bank navigates these turbulent waters in the coming quarters.
The bank's advances and deposits each grew by 9% year-on-year, totaling ₹10.14 lakh crore and ₹10.95 lakh crore, respectively. Net interest income also followed suit, rising to ₹13,606 crore. Yet, the bank's net interest margin (NIM) slipped by 6 basis points to 3.93%. This margin is a crucial measure of profitability, and its decline raises eyebrows.
The darker cloud looming over this financial silver lining is the deterioration in asset quality. The gross non-performing asset (GNPA) ratio inched up to 1.46%, while the net NPA rose to 0.35%. Fresh slippages, or new bad loans, surged to ₹5,432 crore, up from ₹4,443 crore in the previous quarter. A staggering ₹4,900 crore of these slippages stemmed from the retail sector, particularly unsecured personal and agricultural loans.
The bank's management acknowledges the uncertainty in the asset quality cycle. External factors, such as tight liquidity and geopolitical risks, create a fog of unpredictability. The Indian economy's tepid growth adds to the complexity. The bank is keeping a close watch on its portfolio, ready to act as needed.
In the world of finance, stability is a coveted prize. Axis Bank's ability to grow profits amid rising NPAs is a testament to its resilience. However, the increasing bad loans cast a long shadow. Investors and analysts will be keenly observing how the bank navigates these turbulent waters in the coming quarters.
IndiGo Faces Legal Storm Amid Customer Backlash
IndiGo, India's leading airline, finds itself in hot water. The customs department has slapped the airline with a fine of over ₹25 lakh related to jet fuel duties. The Joint Commissioner of Customs in Ludhiana issued the notice, prompting IndiGo's parent company, InterGlobe Aviation, to announce plans for legal recourse. They assert that this fine will not materially impact their financials or operations.
Yet, the airline's troubles don't end there. A social media storm erupted when IPL star Abhishek Sharma shared his dismal experience with IndiGo. He described a chaotic scene at Delhi airport, where he was redirected between counters, ultimately missing his flight. His frustration resonated with many, highlighting a growing dissatisfaction with the airline's customer service.
This incident is not an isolated case. Criticism has been mounting against IndiGo for its handling of passengers. Former Infosys board member Mohandas Pai previously voiced his concerns after passengers were left waiting in a hot aircraft in Bengaluru. Such experiences paint a troubling picture of IndiGo's customer relations.
In the airline industry, reputation is everything. IndiGo's recent missteps could tarnish its image, especially as competition heats up. The airline must act swiftly to address these issues. Legal battles over customs duties are one thing, but a tarnished reputation can be far more damaging.
As IndiGo navigates these choppy skies, it faces a dual challenge: resolving legal issues while mending its relationship with customers. The airline's next moves will be crucial. Will it rise to the occasion, or will it continue to face turbulence? The coming weeks will reveal whether IndiGo can regain its footing and restore passenger trust.
In summary, both Axis Bank and IndiGo are grappling with challenges that could shape their futures. Axis Bank's profit growth is tempered by rising NPAs, while IndiGo's legal troubles are compounded by customer dissatisfaction. Each entity must navigate its unique storm, striving for stability in an unpredictable landscape. The financial and aviation sectors are unforgiving, and both will need to adapt quickly to survive and thrive.
IndiGo, India's leading airline, finds itself in hot water. The customs department has slapped the airline with a fine of over ₹25 lakh related to jet fuel duties. The Joint Commissioner of Customs in Ludhiana issued the notice, prompting IndiGo's parent company, InterGlobe Aviation, to announce plans for legal recourse. They assert that this fine will not materially impact their financials or operations.
Yet, the airline's troubles don't end there. A social media storm erupted when IPL star Abhishek Sharma shared his dismal experience with IndiGo. He described a chaotic scene at Delhi airport, where he was redirected between counters, ultimately missing his flight. His frustration resonated with many, highlighting a growing dissatisfaction with the airline's customer service.
This incident is not an isolated case. Criticism has been mounting against IndiGo for its handling of passengers. Former Infosys board member Mohandas Pai previously voiced his concerns after passengers were left waiting in a hot aircraft in Bengaluru. Such experiences paint a troubling picture of IndiGo's customer relations.
In the airline industry, reputation is everything. IndiGo's recent missteps could tarnish its image, especially as competition heats up. The airline must act swiftly to address these issues. Legal battles over customs duties are one thing, but a tarnished reputation can be far more damaging.
As IndiGo navigates these choppy skies, it faces a dual challenge: resolving legal issues while mending its relationship with customers. The airline's next moves will be crucial. Will it rise to the occasion, or will it continue to face turbulence? The coming weeks will reveal whether IndiGo can regain its footing and restore passenger trust.
In summary, both Axis Bank and IndiGo are grappling with challenges that could shape their futures. Axis Bank's profit growth is tempered by rising NPAs, while IndiGo's legal troubles are compounded by customer dissatisfaction. Each entity must navigate its unique storm, striving for stability in an unpredictable landscape. The financial and aviation sectors are unforgiving, and both will need to adapt quickly to survive and thrive.