Axis Bank expects credit slippages to stabilise and margins to bottom by Q3 FY26, signaling a more predictable operating environment. The private lender reported a weaker than expected Q2FY26 performance, with net profit falling 26 percent YoY as bad loans weighed on earnings.

CFO Puneet Sharma said the elevated credit cost relative to net slippages reflects security erosion on select accounts and faster-than-required aging provisions, but overall provision cover remains stable.

During the quarter, gross slippages fell to Rs 5,696 crore, down from Rs 8,200 crore in Q1 FY26, though slightly higher than Rs 4,443 crore in Q2 FY25. Recoveries and upgrades from NPAs totaled Rs 2,887 crore, while write-offs aggregated Rs 3,265 crore, leaving gross NPAs at 1.46 percent and net NPAs at 0.44 perc

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