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Is Axis Bank's share price fall a knee-jerk reaction?

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Axis Bank, one of the Nifty 50 stocks, faced a decline of around 6% on Thursday. Although the bank's performance in Q1FY25 was satisfactory, investors showed concern about the increase in credit cost. The management stated that the higher credit cost in the last quarter was due to seasonality and lower recoveries, and it is unclear whether this will be a one-off or a trend. The fall in the share price may be due to investors expecting the credit cost to remain low, despite FY24 being a strong year for Axis Bank with low gross NPAs. The bank's gross slippage ratio increased to 2%, with a significant portion coming from the retail portfolio, which includes a growing high-risk unsecured segment. Despite a growth in net interest income and a robust pre-provisioning operating profit, loan loss provisions doubled year-on-year, resulting in a lower pre-tax profit growth.