Speaking during the Q4 earnings interaction, with ET NOW, Axis Bank’s Chief Financial Officer Puneet Sharma responded to a series of queries from analysts, noting at the outset that he would address a few key points before inviting Amitabh Chaudhry to take over for the remaining discussion.
However, he offered reassurance on its performance, highlighting that while the portfolio was still being monitored independently, it consistently delivered results that were better than the assumptions made at the time of acquisition. These assumptions had formed the basis for the deal’s valuation, making the outperformance a positive indicator for the bank.
On the issue of potential downside risks and stress scenarios, Sharma said the bank has already taken a conservative and forward-looking approach. He pointed out that the internal risk team has modeled a worst-case scenario that factors in extreme macroeconomic conditions. These include crude oil prices rising sharply to 150 dollars per barrel and sustaining at that level for a full year, along with a depreciation of the domestic currency by nearly 20 percent from current levels. He described these assumptions as significantly severe and not reflective of the bank’s base case outlook, but necessary for prudent risk assessment.
Sharma further noted that the bank has created strong and comprehensive provisions to account for such adverse situations. According to him, the provisions currently in place are sufficient to cover potential credit costs through the financial year 2027, even under these extreme conditions. This, he said, reflects the bank’s focus on maintaining a resilient balance sheet and being adequately prepared for uncertainty.
He added that such precautionary measures position Axis Bank to navigate a potentially volatile global environment, especially in light of ongoing geopolitical uncertainties. The bank’s strategy, he emphasised, is to remain cautious while ensuring stability and long-term strength.
(Disclaimer: The above article is meant for informational purposes only, and should not be considered as any investment advice. ET NOW DIGITAL suggests its readers/audience to consult their financial advisors before making any money-related decisions)
