Axis Bank shares jump 4% today after Q2 results; brokerages stay bullish despite one-offs hurting earnings

The valuation is undemanding albeit the lower RoA and the stock’s downside is limited.

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26 Aug, 2025 12:21

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Axis Bank shares rose as much as 4 percent today after the private sector lender reported a 26 percent year-on-year decline in net profit to Rs 5,090 crore for the quarter ended September 2025, as higher provisions weighed on earnings. The stock jumped to a high of Rs 1,216.9 in the opening trade, against yesterday's closing of Rs 1,172.5.

Axis Bank’s total income rose 1 percent to Rs 37,595 crore in Q2 FY26, while net interest income grew 2 percent year-on-year to Rs 13,745 crore. Net interest margin (NIM) stood at 3.73 percent, compared with 3.8 percent in the June quarter and 3.99 percent a year earlier, reflecting the impact of cumulative 100-basis-point rate cuts by the Reserve Bank of India this year.

The private sector lender’s asset quality improved with gross NPAs at 1.46 percent and net NPAs at 0.44 percent. Provisions rose 61 percent year-on-year to Rs 3,547 crore, including a one-time Rs 1,231 crore standard asset provision linked to discontinued crop loan products. CFO Puneet Sharma said the loans are fully secured and the provision will be written back by FY28, as the bank continued to post 12 percent loan growth and steady deposit expansion.

• Also read | Axis Bank Q2 results: Net profit falls 26% to Rs 5,090 crore, misses estimates

• HSBC has a ‘buy’ rating, raising its target price to Rs 1,460, saying strong loan growth and asset quality support an “earnings inflection.”
• Nomura also has a ‘buy’ call with a target price of Rs 1,440, noting strong operational performance and sharp decline in technical slippages, while acknowledging that one-offs impacted profit.
• Jefferies has a ‘buy’ rating with a target of Rs 1,430, highlighting that Q2 profit was ahead of estimates, supported by stable NIMs and healthy loan and deposit growth, even as the Rs 1,200-crore provision and Rs 900-crore PSLC cost were near-term negatives.
• Bernstein issued an ‘outperform’ rating with a target price of Rs 1,250, pointing to sequential growth, sharp recovery in asset quality, and lower slippages as signs that stress may be bottoming out.

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