Axis Bank vs Kotak Mahindra Bank (2026): NIM, NPAs, ROA, Growth & Which Is Better?

Axis Bank vs Kotak Bank: Q1 FY2027 scoreboard

Axis Bank is currently growing almost every major balance-sheet line faster

Axis deposits grew 18% and advances 19% year on year.

That is an unusually balanced growth equation.

Banks can create short-term earnings growth by pushing credit much faster than deposits, but that often creates future funding pressure.

Axis did not need to do that in Q1.

Period-end deposits reached approximately ₹13.73 lakh crore.

Net advances reached approximately ₹12.62 lakh crore.

The bank gained market share in both deposits and loans during the period.

Kotak's loan growth is slower, but still healthy

Kotak's net advances increased approximately 15% year on year to ₹5.12 lakh crore.

Customer assets, which include credit substitutes alongside advances, increased about 16% to ₹5.71 lakh crore.

Average total deposits increased roughly 14% year on year.

Period-end deposits increased around 12%.

Kotak is therefore not a low-growth bank.

It is simply expanding more cautiously than Axis from a smaller balance sheet.

Axis's deposit performance is arguably the strongest part of Q1

Quarterly-average CASA balances increased approximately 13% year on year.

Average savings deposits increased 14%.

Average current accounts increased 13%.

Term deposits increased more than 20%.

This means Axis's 18% overall deposit growth was not created by only one expensive funding bucket.

The bank also reported a meaningful decline in cost of funds year on year.

That gives Axis a potential NIM stabiliser after several quarters of industry-wide funding pressure.

Kotak still has the superior CASA franchise

Kotak's CASA ratio was approximately 40.3% at June 2026.

Axis's month-end CASA ratio was approximately 38%.

Kotak's average current-account deposits increased around 15% and fixed-rate savings deposits 16%.

A strong CASA franchise matters because banks with more low-cost deposits have greater flexibility when loan pricing becomes competitive.

It is one reason Kotak can sustain a 4.5%-plus NIM while operating with comparatively conservative credit risk.

The NIM gap is more than one percentage point

Kotak's Q1 NIM was 4.53%. Axis reported 3.46%.

That is a very large difference for banks.

Kotak earns more spread on each rupee of interest-earning assets.

Part of that difference reflects portfolio mix.

Kotak has historically operated with a strong retail and commercial banking franchise, relatively low credit costs and a valuable savings-account base.

Axis operates a larger corporate and wholesale balance sheet and has pursued aggressive growth across several lower-yielding focus segments.

Yet Axis produces higher ROE despite the lower NIM

Axis's standalone ROE was approximately 14.16%, compared with Kotak at 11.98%.

This seems contradictory until capital is considered.

Kotak operates with CET1 capital above 22%.

That is an enormous equity buffer.

More capital lowers financial risk but also reduces the amount of profit generated per rupee of shareholder equity.

Axis operates with less excess capital and therefore converts its equity base into a higher current ROE.

ROA produces the opposite conclusion

Kotak's standalone ROA was approximately 2.14%. Axis reported 1.51%.

ROA measures profit relative to the asset base rather than the equity base.

That makes it especially useful when two banks carry very different capital ratios.

Kotak earns significantly more from each rupee of assets.

Axis earns more from each rupee of shareholder equity partly because it uses that equity more intensively.

This is a textbook example of why bank investors should examine both ROA and ROE.

Kotak currently has the cleaner loan book

Kotak's GNPA ratio declined to 1.18% and NNPA to just 0.27%.

Axis's GNPA was approximately 1.28% and NNPA 0.39%.

Both are strong.

Kotak nevertheless wins on both measures.

Its provision coverage ratio was approximately 78%.

Slippages also fell materially year on year.

Axis's asset-quality improvement is arguably more impressive than the absolute gap

Axis GNPA fell 29 basis points year on year while the loan book expanded 19%.

NNPA declined six basis points.

Gross slippage ratio declined more than 130 basis points.

Net credit cost fell from 1.38% to approximately 0.63%.

That combination suggests recent underwriting and collections are improving rather than simply benefiting from denominator growth.

Why Axis Q1 profit grew faster than core revenue

Axis PAT increased approximately 23% even though NII grew only 8%.

The main reason was a large decline in provisions and credit costs from the unusually elevated previous-year quarter.

Operating expenses grew only about 5%.

Core operating profit increased roughly 10%.

So the earnings improvement was real, but part of the 23% PAT growth represents credit-cost normalisation rather than pure top-line acceleration.

Kotak's 26% PAT growth came with cleaner core growth

Kotak standalone PAT reached approximately ₹4,123 crore, up 26% year on year.

NII increased about 9%.

Fees and services increased 11%.

Operating profit increased roughly 10%.

Credit cost declined to 0.46% from the much higher previous-year level.

Kotak therefore benefited from both operating growth and lower credit costs.

The capital difference is enormous

Kotak's total capital adequacy ratio was approximately 22.8%, with CET1 around 22.4%.

Axis reported total capital adequacy of approximately 16.67%.

Axis's Tier-I capital ratio was approximately 15.35%.

Both comfortably exceed regulatory requirements.

Kotak, however, holds several percentage points of additional equity capital that could support acquisitions, faster lending growth or unexpected stress.

The cost is lower current ROE.

Kotak is already using part of that balance-sheet flexibility for inorganic growth

The bank has pursued targeted portfolio and business acquisitions rather than simply letting excess capital remain idle.

Recent strategic moves include equipment-financing assets and an agreement to acquire Deutsche Bank's India retail, private-banking and wealth-management businesses.

These transactions can improve growth and fee income if integration succeeds.

They can also reduce the simplicity that historically characterised Kotak's conservative balance sheet.

Axis has a different cross-sell engine

Axis operates a much larger loan book and has built substantial scale in credit cards, payments, merchant acquiring and wealth management.

Its mobile banking application has approximately 16 million monthly active users.

Axis also holds a meaningful merchant-acquiring terminal market share.

The strategic objective is to increase deposits and fee income around customers already using the bank for transactions rather than relying only on spread income.

Axis currently looks cheaper on book value

Axis reported book value of approximately ₹681 per share at June 2026.

At Bull Run's August 25 price of ₹1,235, the stock trades around 1.81 times book.

Kotak's post-split book value was approximately ₹189 per share.

At ₹401.60, Kotak trades around 2.12 times book.

Axis therefore trades at roughly a 15% lower book multiple while currently generating higher ROE and faster advances growth.

Why Kotak can still deserve the higher P/B

Bank valuation is not about paying the lowest multiple possible.

A higher-quality bank can rationally trade at a premium if it produces superior ROA, protects book value through credit cycles and maintains excess capital.

Kotak's 2.14% ROA, 0.27% NNPA and 22.4% CET1 ratio support that premium.

The debate is whether those advantages justify paying more when Axis is growing materially faster.

Axis's current price action is easier to interpret

Axis is below its 50-, 100- and 200-day moving averages in Bull Run's current snapshot.

The one-year business and stock performance remain positive despite weaker medium-term momentum.

Axis Bank: what the current thesis depends on

Kotak Mahindra Bank: what the premium buys

Axis Bank vs Kotak Bank FAQs

Which bank has the higher NIM?

Kotak Mahindra Bank at approximately 4.53%, compared with Axis Bank at 3.46%.

Which is growing loans faster?

Axis Bank, with net advances up about 19% year on year versus Kotak at approximately 15%.

Which has lower NPAs?

Kotak, with GNPA of 1.18% and NNPA of 0.27%.

Which has higher ROA?

Kotak at approximately 2.14%, compared with Axis at 1.51% standalone.

Which has higher ROE?

Axis Bank at approximately 14.16%, versus Kotak at about 11.98%.

Which has stronger capital?

Kotak by a wide margin, with CET1 capital above 22%.

Which is cheaper on book value?

Axis Bank, at approximately 1.81x June book value compared with Kotak near 2.12x.

Why is Kotak's historical price chart distorted?

The bank completed a 1:5 share subdivision in January 2026. Unadjusted historical price series can therefore produce false return calculations.

Research sources

• Bull Run current market and ownership data
• Axis Bank official Q1 FY2027 results
• Axis Bank quarterly investor disclosures
• Kotak Mahindra Bank official Q1 FY2027 investor information