The March 2026 quarter results of Axis Bank were keenly awaited in a bid to understand the performance on various operational factors at a time when the domestic economy has been reeling from the Middle East crisis.
The Axis Bank stock ended Friday’s trade 0.25% lower at Rs 1,366, and not too far from its 52-week high of Rs 1,418.3 that was reached on 3 February, 2026.
To gain an in-depth understanding of Axis Bank’s performance in Q4FY26, we compared its performance to HDFC Bank, the largest private sector bank.
March 2026 quarter – Axis Bank’s core operations grow strongly
Now, let’s analyse the March 2026 results of Axis Bank and how do they compare with HDFC Bank.
Performance in the March 2026 quarter
| Bank | Growth in lending (% change) | Net Interest Margin (NIM) |
| Axis Bank | 18.6% | 3.73% |
| HDFC Bank | 12.1% | 3.53% (on interest earning assets) |
The NIM Pressure Cooker: Why Axis Margin Resiliency Matters
Axis Bank’s credit growth was 18.6% y-o-y to Rs 12.33 lakh crore in the March 2026 quarter, and that was thanks to a strong growth in its SME loans and corporate loans including mid-corporates.
The March quarter is typically a busy / peak season for credit, with individuals, small and large companies borrowing funds heavily before the close of the financial year.
Credit growth is an operational parameter of a bank that is keenly tracked.
Larger rival, HDFC Bank, recorded credit growth of 12.1% y-o-y to Rs 29.37 lakh crore in the March 2026 quarter. The largest private sector bank saw strong demand from small and mid-market loans that grew by 17.2% y-o-y and business banking that grew by 20% y-o-y in the fourth quarter of FY26.s
Of equal importance, Axis Bank’s deposits grew 13.6% y-o-y to Rs 13.35 lakh crore in Q4FY26, with the bank reporting strong growth in time deposits, largely fixed deposits.
Deposits form the basis of extending credit for a bank, short and long-term to clients.
Meanwhile, HDFC Bank’s deposits grew 14.4% y-o-y to Rs 31.05 lakh crore in Q4FY26, and that was also owing to strong growth in time deposits.
Managing NIM pressure – strong growth in high-margin loans to SMEs and mid-corporates
Net Interest Margin (NIM) is another key operational metric tracked by investors. For
Axis Bank, its NIM domestic was 3.73% in Q4FY26 as against 4.08% a year earlier.
Loans to smaller enterprises and mid-corporates enable banks to earn a higher rate of interest on loans / credit as against loans to top-rated corporates, and help them manage the pressure on NIMs. The RBI has taken several steps to boost lending in the broader banking system and this includes the cut in repo rates in early December 2025. This in turn has put a temporary pressure on NIMs of banks, like Axis Bank.
Earlier, HDFC Bank, highlighted it’s NIM was 3.53% on interest earning assets in the March 2026 quarter as against 3.7% a year earlier.
Asset quality remains strong – voluntary, additional one-time provision of Axis Bank
Asset quality of Axis Bank has remained strong – its % of net NPAs was 0.37% in the March 2026 quarter as against 0.33% a year earlier.
Axis Bank has also made a voluntary, additional one-time provision of Rs 2,001 crore in the March 2026 quarter, and its provisions were Rs 3,522.2 crore in Q4FY26 as against Rs 1,359.4 crore a year earlier.
As a result, Axis Bank’s standalone net profit declined marginally y-o-y to Rs 7,071.3 crore in the March 2026 quarter.
For HDFC Bank too, its asset quality has also been quite stable — its % of net NPAs to net advances was 0.38% in the March 2026 quarter as against 0.43% a year earlier.
Its provisions has also come down by nearly 18% y-o-y to Rs 2,609.6 crore in the March 2026 quarter, and it helped HDFC Bank’s standalone net profit to rise 9% y-o-y to Rs 19,221 crore in the quarter under review.
HDFC Bank has one of the lowest NPA ratios in the domestic banking industry and it is often viewed as a benchmark for other banks.
Axis Bank and HDFC Bank’s core banking operations are reflected in their standalone results.
Return on Assets (RoA) – Efficiency kings
Axis Bank’s Return on Assets (annualised) was 1.58% for the March 2026 quarter, and 1.45% for FY26.
Meanwhile, HDFC Bank’s return on assets (average) – not annualized was 0.48% in the March 2026 quarter, and for FY26 it was 1.94%.
HDFC Bank along with smaller rival, Kotak Mahindra Bank, have one of the highest Return on Assets (ROA) in the banking industry, over the past several quarters. Kotak Mahindra Bank will declare its results on May 2.
Growth opportunities and investor concerns
Investors on Dalal Street will continue to monitor Axis Bank and other leading banks on key operational parameters, going forward – deposit and loan growth, NIM and level of NPAs. The RBI over the past several quarters has taken steps to boost lending in the broader banking system.
However, a cause of concern for investors remains that there are no clear signs of an end to the Middle East war and the shortage of various petroleum products in the country.
Various domestic and international bodies have lowered the growth forecast for the Indian economy to 6% to 6.5% for FY27, given the Middle East war.
Also, the impact of the Middle East war on the local economy will be closely tracked by investors, and whether there is a rise in NPAs in the broader banking system.
Axis Bank v/s HDFC Bank – which bank offers better valuations to investors
Now, let’s take a look at the valuations of Axis Bank and compare it to that of HDFC Bank.
Axis Bank v/s HDFC Bank valuations
| Bank | Price to (standalone) book value |
| Axis Bank | 2.1 |
| HDFC Bank | 2.2 |
On the preferred valuation matrix, price to (standalone) book value, Axis Bank trades at nearly 2.1 times.
Over the past 5 years, the Axis Bank stock has traded at a price to (standalone) book value between 1.7 times and 3.1 times
On the preferred valuation matrix, price to (standalone) book value, HDFC Bank trades at nearly 2.2 times.
Over the past 5 years, the HDFC Bank stock has traded at a price to (standalone) book value between 2.1 times and 4.8 times
HDFC Bank is currently dealing with the recent resignation of Atanu Chakraborty on March 18, as the part-time chairman and independent director of the bank with immediate effect. HDFC Bank is valued closer to the lower end of its price-to-(standalone) book value, and it has superior ROA as compared to Axis Bank.
Investors could put HDFC Bank and Axis Bank on their watch list of stocks for 2026, and see if their performance matches up to expectations.
Amriteshwar Mathur is a financial journalist with over 20 years of experience.
The writer and his family have no shareholding in any of the stocks mentioned in the article.
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