Post by : Meena Ariff

Photo: Reuters

On Friday, July 18, shares of Axis Bank fell by almost 6 per cent after it reported a fall in its profit for the June quarter. At around 3:24 pm, the bank's shares were down by 5.25 per cent, trading at Rs 1,098.90 each.

The market value of Axis Bank is about Rs 3.4 lakh crore. This means if we add up the value of all its shares, the total is nearly Rs 3,40,944 crore.

June Quarter Results: Profit Drops

On Thursday, Axis Bank announced that its consolidated net profit for the June quarter was Rs 6,243.72 crore. This was 3 per cent lower compared to the same time last year.

If we look only at its standalone profit, which is the profit made by the bank alone without counting its smaller companies, the bank made Rs 5,806 crore. Last year in the same quarter, it made Rs 6,034 crore. This shows a small drop.

But if we compare it to the last quarter (January to March), when it had earned Rs 7,117 crore, the fall in profit is quite big.

Reason for Lower Profit

The bank said its main income, which it earns from its core banking work, did not grow much during this period. Also, it faced a special loss of Rs 614 crore. This was called a “technical impact” by the bank.

Because of this loss, the overall profit was affected and became less than what was expected.

Profits from Subsidiary Companies Grew

Even though the main profit of Axis Bank fell, its small companies within India did well in this quarter. Together, their post-tax profit increased by 4 per cent, reaching Rs 451 crore.

One of these companies is Axis Finance. It showed a very good growth of 23 per cent in its profit, earning Rs 189 crore.

Another company is its asset management arm, which manages investments for people. Its profit grew by 12 per cent to Rs 130 crore.

Share Price History in Recent Times

Axis Bank is one of the big companies in India and is also part of the BSE Sensex, which shows how India’s stock market is performing.

If we look at how Axis Bank shares performed recently:

• In the last 1 week, the shares fell by 6.39 per cent.
• In the last 2 weeks, the shares dropped 6.69 per cent.
• In the last 1 month, the shares fell by 10 per cent.
• In the last 3 months, they went down by 7.71 per cent.
• In the last 1 year, shares fell by 16.06 per cent.

So, we can see that the shares have been falling in the past few months and even in the past year.

Long-Term Share Performance

But if we look at the share performance over a longer time, it tells a different story:

• In the past 2 years, Axis Bank shares rose by 14.05 per cent.
• In the past 3 years, shares went up by 60.54 per cent.
• In the past 5 years, shares grew by 153.56 per cent.
• In the past 10 years, shares increased by 82.43 per cent.

This shows that people who invested in Axis Bank for a long time have earned good returns, even though there were ups and downs in between.

Axis Bank Dividend History

Axis Bank pays dividends to its shareholders from its profits. A dividend is the money a company gives to people who own its shares as a reward for investing.

This year, Axis Bank gave a dividend of Re 1 per share. In 2019, 2022, and 2023, it declared dividends of Re 1 per share each year.

This means that, recently, the bank has been giving a small but steady dividend to its shareholders.

Bonus History

Axis Bank has never given any bonus shares to its shareholders. Bonus shares are extra shares that companies give to their existing shareholders for free. But Axis Bank has not issued any such bonus so far.

Dividend Yield of Axis Bank

At the current market price, the dividend yield of Axis Bank is 0.091 per cent.

Dividend yield is a way to measure how much dividend you earn compared to the share price. For example, if the share price is high but the dividend is low, the dividend yield becomes small, as in the case of Axis Bank.

Future for Axis Bank

Looking at the future, Axis Bank will need to work on increasing its profits again to keep its shareholders happy. The fall in profit this quarter was mainly because of technical reasons, as the bank said, but it will have to make sure its main income from banking grows well in the coming quarters.

Investors will also keep an eye on how its small companies perform, as they have shown good growth this quarter.

The share price may remain under pressure if the bank does not show better results in the coming months. But for long-term investors, Axis Bank has been a good stock as it has given positive returns in the past 2, 3, 5, and 10 years.

In simple words, Axis Bank’s profit fell this quarter, which caused its share price to fall by almost 6 per cent on Friday. But the smaller companies made more profit. The bank has given dividends every year, but it has never given bonus shares. In the long run, its share price has grown well, giving good returns to people who invested for many years.