Motilal Oswal's research report on Axis Bank
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. Provisioning expenses stood at INR35.5b (18% higher than MOFSLe). The bank made a one-time standard asset provisioning of INR12.31b following an RBI inspection related to two discontinued crop loan variants. Loan book grew 11.7% YoY (up 5.4% QoQ). Deposits grew 10.7% YoY (up 3.6% QoQ), and CD ratio increased to 92.8% (vs. 91.2% in 1QFY26). CASA mix stood stable at 40%.
Outlook
We fine tune our earnings estimates and project FY27 RoA/RoE at 1.6%/14.4%. Reiterate Neutral with a revised TP of INR1,300 (1.6x FY27E ABV).
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