Axis Bank share price jumped nearly 4% in early trade on Tuesday after the private sector lender reported its Q3 results. Axis Bank shares rallied as much as 3.88% to ₹1,309.00 apiece on the BSE, despite weakness in the broader Indian stock market today.
Axis Bank reported a 3% year-on-year (YoY) growth in its net profit to ₹6,489.6 crore for the third quarter of FY26, aided by lower provisions and controlled operating expenses. The bank’s net interest income (NII) rose 5% YoY to ₹14,286.4 crore.
Asset quality of Axis Bank improved sequentially, as gross NPAs eased to 1.40% from 1.46% in the September quarter and net NPAs declined to 0.42% from 0.44%, QoQ.
The bank expects margins to remain under pressure in the near term, as the full effect of the recent rate-cut sinks in; however, the management expects recovery in FY27 and has given guidance of 3.8% net interest margin (NIM).
Should you buy, sell or hold Axis Bank shares?
Motilal Oswal Financial Services (MOFSL) expects the bank’s margins to bottom out over Q4FY26 and Q1FY27. With credit costs trending down, it believes there is further scope for moderation, supported by easing stress in the unsecured portfolio and improved growth traction.
“Business growth, which had been subdued earlier, has now picked up, aided by healthy deposit growth, leading to a decline in the CD ratio. The bank has reiterated its medium-term loan growth guidance of ~300 bps above industry levels. Asset quality improved QoQ, with GNPA and NNPA ratios declining, although slippages were marginally higher due to seasonal stress in the agri/KCC segment,” MOFSL said.
The brokerage firm fine-tuned its earnings estimates and expects FY27E RoA and RoE of 1.6% and 14.4%. It retained a ‘Neutral’ rating on Axis Bank shares with a target price of ₹1,400 apiece.
Anand Dama, Senior Research Analyst at Emkay Global Financial Services Ltd. said that Axis Bank share price is trading at cheap valuations of 1.4x Dec-27E ABV/1.3x FY28E ABV.
Hence, Emkay Global retained a ‘Buy’ call on the stock and raised Axis Bank share price target to ₹1,475 apiece from ₹1,400 earlier.
Nuvama Institutional Equities noted that Axis Bank has outperformed peers on deposit and loan growth over two quarters. Given stable asset quality and higher growth, it upgraded its rating on Axis Bank shares to ‘Buy’ from ‘Hold’ and raised Axis Bank share price target to ₹1,500 apiece from ₹1,180 earlier.
“Last quarter’s regulatory agri provision, which was viewed negatively for Axis Bank, has now affected peers too. The bank ruled out any large sized M&A and denied any QIP for it,” Nuvama said.
Axis Bank share price has risen 7% in one month and has rallied over 20% in six months. The stock has gained 38% in one year, and has delivered multibagger returns of 107% in the past five years.
At 9:35 AM, Axis Bank share price was trading 3.64% higher at ₹1,305.95 apiece on the BSE.
Disclaimer: The views and recommendations made above are those of individual analysts or broking companies, and not of Mint. We advise investors to check with certified experts before making any investment decisions.
