Axis Bank’s share price rose more than 4 per cent in intraday trade on the BSE on Thursday, October 16, a day after the company reported its September quarter (Q2FY26) results. Axis Bank share price opened at ₹1,211 against its previous close of ₹1,169 and rose 4.2 per cent to an intraday high of ₹1,217.65. The stock, however, pared some gains and traded 2 per cent up at ₹1,192.95 around 11:25 am. Equity benchmark Sensex was 0.55 per cent up at 83,060 at that time.
Axis Bank Q2 results
Axis Bank’s net profit dropped by 26 per cent year-on-year (YoY) to ₹5,090 crore, while net interest income (NII) rose modestly by 2 per cent year-on-year to ₹13,745 crore. Net interest margin (NIM) for Q2FY26 stood at 3.73 per cent compared to 3.99 per cent in Q2FY25.
The bank’s operating profit for the quarter declined 3 per cent YoY to ₹10,413 crore, while operating cost grew 5 per cent YoY in Q2FY26.
Axis Bank stock: Should investors buy, sell or hold after Q2 results?
Experts appear largely positive about the bank for the long term amid expectations of improvement in loan growth and margins. However, repo rate cuts by the RBI remain a key factor to watch out for.
Nirmal Bang Institutional Equities has upgraded its rating on Axis Bank to a ‘buy’ from a ‘hold’, pegging the target price of ₹1,401.
“Due to expectations of improvement in loan growth ahead, we have revised our FY27E and FY28E PAT estimates upwards by 5.3 per cent and 5.8 per cent, respectively. We have estimated loan and earnings CAGRs of 12.8 per cent and 10.7 per cent, respectively, over FY25-FY28E, which will result in RoA and RoE of 1.7 per cent and 14.3 per cent, respectively, in FY28E,” Nirmal Bang said.
Nirmal Bang has raised the target price to ₹1,401 against ₹1,200 earlier, valuing the stock at 1.7 times Sept-27E ABV against 1.4 times Sept-27E earlier, plus subsidiary value per share of ₹94.
“Our target multiple is at a 9.4 per cent discount to the past five-year average multiple of 1.88 times ABV,” said Nirmal Bang.
JM Financial has maintained a buy call on the stock with a target price of ₹1,385, increasing its FY26-28F EPS estimates by nearly 2-4 per cent, factoring in higher margins.
JM Financial noted that Axis Bank delivered an operating profit beat despite lower treasury gains and an increase in operational expenditure.
“The bank has delivered a surprise on the margin front with just a seven basis points contraction. We expect loan growth momentum to inch up by nearly 15 per cent in the coming quarters, as liquidity conditions are expected to improve. Moreover, we expect improvement in credit cost and bottoming of margins from next quarter,” JM Financial said.
According to the brokerage firm, the core bank currently trades at 1.4 times FY27E BVPS, and it believes a sustained re-rating will depend on a more meaningful acceleration in earnings growth.
On the other hand, Motilal Oswal Financial Services has maintained a “neutral” view on the stock with a target price of ₹1,300.
Motilal underscored that Axis Bank has maintained its through-cycle margin guidance of nearly 3.8 per cent, even as it remains watchful of further repo rate cuts in the coming months.
“We finetune our earnings estimates and project FY27 RoA and RoE at 1.6 per cent and 14.4 per cent, respectively,” said Motilal Oswal.
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