Axis Bank Q1 profit growth expected to offset margin pressure from deposit repricing

Analysts forecast healthy net interest income for India's third-largest private lender, even as competitive funding costs threaten to compress net interest margins.

By Handelsavisen Newsroom · Automated 2026-07-18 03:32 UTC · 1 min read

Axis Bank is set to report its first-quarter FY27 financial results on Saturday, July 18, with market consensus pointing to robust growth in net profit and net interest income (NII).

However, the lender faces headwinds from deposit repricing and competitive funding pressures that are expected to weigh on its net interest margin (NIM).

This dynamic follows Axis Bank's earlier business update for the quarter, which showed gross advances and deposits both rising approximately 18% year-on-year.

The divergence between top-line growth and margin compression highlights the ongoing challenge for Indian private banks to balance volume expansion with cost-of-fund management.

While asset growth remains strong, the need to retain deposits in a competitive environment is pushing up funding costs, creating a squeeze on profitability per unit of loan.

This dynamic follows Axis Bank's earlier business update for the quarter, which showed gross advances and deposits both rising approximately 18% year-on-year.

The bank has been actively working to optimize its liability mix, with Managing Director and CEO Amitabh Chaudhry previously outlining plans to replace high-cost domestic deposits with cheaper foreign-currency funds raised from the Indian diaspora.