Axis Bank Ltd. share price target

Update Note

Retail and SME comprise ~69% of total loans Q3FY26 performance: Axis Bank reported healthy business momentum though margin pressure persisted in Q3FY26. Advances grew 14% YoY (4% QoQ), led by continued traction in SME and mid-corporate segments, while retail portfolio remained benign in single digit. Deposits recorded robust growth of 15% YoY (5% QoQ), led by healthy CASA inflows, with CASA ratio sustained at 39%. NIM for Q3FY26 was 3.64%, down 9 bps QoQ, reflecting continued transmission of rate cuts. Core operating profit rose 7% YoY (9% QoQ), driven by strong fee income growth...

Axis Bank reported a healthy Q3FY26 performance, with operating metrics reflecting steady execution despite a softer interest rate environment. Net interest income grew 5% YoY to Rs14,287 crore, supported by balance sheet expansion and stable margins. Core pre-provision operating profit increased 7% YoY to Rs10,815 crore, aided by healthy fee income growth and controlled operating costs. Profit after tax rose 3% YoY to Rs6,490 crore, with a strong 28% QoQ improvement driven by operating leverage and stable credit costs. We...

Axis Bank (AXSB) reported 3QFY26 net profit of INR64.9b (up 28% QoQ, 11% beat), aided by lower provisions and controlled opex.

PPoP in line with estimates; return ratios and asset quality improving

We sense a strategic shift in Axis Bank (Axis)’s playbook, basis our meeting with Mr Amitabh Chaudhry (MD&CEO), Mr Subrat Mohanty (ED), Mr Puneet Sharma (CFO) and Mr Rahul Jain (Head-IR).

The management said that NIM is expected to bottom out by Q3FY26, assuming there are no further rate cuts and the balance sheet mix improves. businesses. The management guided that margin is likely to bottom out in the coming quarters as anticipated repo rate cuts exert near-term yield pressure. The bank is focused execution excellence, expanding its distribution network across 2,740 branches and accelerating digital transformation through pioneering agentic AI-powered payment solution for UPI and multiple CBDC initiatives. Company's management is focused on its GPS strategy for building a resilient franchise....

Retail and SME comprise ~69% of total loans Q2FY26 performance: Axis Bank reported improvement in growth and asset quality trend in Q2FY26, however, one-time regulatory provision impacted earnings momentum. Advances rose 12% YoY (5% QoQ) to 11.1 lakh crore, led by strong SME and mid-corporate growth, while deposits increased 11% YoY (4% QoQ) to 12.1 lakh crore. NIM contracted 7 bps QoQ to 3.73%, though the decline was less than expected due to proactive repricing of term deposits. Asset quality improved, with GNPA/NNPA at 1.46%/0.44%, while net slippages declined 54% QoQ to 2,808...

Axis Bank (Axis) reported a mixed set of numbers with better-than-expected top line (strong growth and contained NIM pressure), though PAT at INR 50.9bn missed our estimates due to elevated provisioning (including a one-time standard asset charge).

Axis Bank’s core profitability remains solid despite transient headwinds from regulatory provisioning and PSLC costs. We expect NIMs to stabilize and credit costs to normalize in H2 FY26, supporting a rebound in RoA/RoE.

Axis Bank (AXSB) reported 2QFY26 net profit of INR50.9b (26% YoY decline, 8% miss) amid higher provisions. NII grew 1.4% QoQ (up 2% YoY) to INR137.4b (4% beat). NIMs contracted 7bp QoQ to 3.73%, aided by 4bp growth from interest reversals.

In Q1FY26, Axis Bank’s Net Interest Income (NII) grew by 0.8% YoY (-1.8% QoQ) to INR 135,598 Mn., in-line with our estimates. The NIM declined by 17bps sequentially to 3.80%, (-25bps YoY).

AXSB saw a weak quarter yet again as core PAT missed PLe by 26.6% due to asset quality related technical impact of Rs6.14bn. Adjusting for the same, core PAT missed PLe by 17% owing to lower NIM and fees. Owing to more stringent recognition criteria, gross slippages were more by Rs27.1bn (one-time impact). In our view, this may also reflect the underlying stress. As bank does not intend to further change the recognition policy, upcoming quarters of FY26 and FY27 would see lower credit costs since stress is moderating in PL/CC. We raise...

Axis Bank (Axis) reported disappointing Q1FY26 with a massive rise in gross/net slippages and credit costs. Axis, in its Q4FY25 call, without quantifying, had mentioned that it has tightened the upgrade and classification criteria (technical impact), which could adversely impact asset quality outcomes.

Asset quality adversely impacted largely due to the adoption of prudent asset recognition norms

The in-line NII and higher treasury income notwithstanding, Axis Bank reported a 10% miss on PAT (at Rs58bn) and 1.5% RoA, primarily due to significantly higher provisions as it tweaked its stress recognition policy on cash credit/overdraft (CC/OD) facility and owing to one-time settlement accounts.

Axis Bank’s (AXSB) stock has significantly underperformed key private peers, led by concerns on muted growth, elevated credit cost, and a decline in RoE.

We met Mr Subrat Mohanty, Executive Director and Mr Puneet Sharma, CFO of Axis Bank (Axis). The bank did not provide any guidance, though it acknowledges the healthy systemic liquidity; this, in conjunction with the hefty cumulative cut, should aid systemic loan growth, albeit with a lag.

We met Axis Bank’s ED Subrata Mohanty and CFO Puneet Sharma, to understand the business/profitability outlook, more so in view of the recent monetary policy.

Axis Bank reported a steady Q4FY25, with financial growth driven by robust retail and digital performance, improved asset quality, and disciplined cost management. The bank's investments in technology and branch expansion are expected to drive customer growth and enhance overall performance. Axis Bank's asset quality remains a key strength, with one of the lowest NPA ratios among large private banks, supported by strong provision coverage and declining slippage rates. Additionally, Axis Bank is expected to sustain healthy credit growth, supported by a...