Accumulate Axis BANK; target of Rs 1186: Deven Choksey

Deven Choksey's research report on Axis BANK

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). PPOP (Pre-Provisioning Operating Profit) grew by 13.9% YoY (+7.1% QoQ) to INR 115,152 Mn., above our estimates by 8.5% led by higher non-interest income and lower other operating expenses. The non-interest income for the quarter grew by 25.5% YoY (+7.1% QoQ) to INR 72,581 Mn. Trading profits and other income, grew by 161.0% YoY to INR 15,120 Mn., primarily led by higher realized gains on government securities and bonds, reflecting effective portfolio management amid favorable rate movements. Net profit declined by 3.8% YoY (-18.4% QoQ) to INR 58,061 Mn., below our estimate by 9.2% driven by sharp increase in provisions.

Outlook

We value Axis Bank at 1.6x Mar’27 ABVPS, implying a target price of INR 1,186. We reiterate our “ACCUMULATE” rating on the stock, as we believe the franchise continues to exhibit structural resilience across asset quality, profitability, and deposit traction.