Keeping their momentum strong, shares of Axis Bank, the country’s fourth-largest private sector bank, gained another 3.2% in Thursday’s trade, October 23, to hit a fresh one-year peak of ₹1,276, extending their bull run to the fifth trading session as follow-through buying continued after the release of the bank’s September quarter numbers.
The recent rally in the private sector lender has also pushed the shares closer to their record high of ₹1,339.65, and they are now just 5% away from reaching that level.
Last week, the bank released its second quarter numbers. Though the net profit came in sharply lower than analysts’ consensus estimates due to elevated provisioning, it reported improvements in asset quality, better-than-expected net interest margins, and a pickup in loan and deposit growth.
Analysts expect the stock price to rise as high as ₹1,450
Brokerages maintained a broadly bullish stance on Axis Bank following its September quarter numbers, viewing the one-time provisioning hit as temporary and highlighting the lender’s steady operational performance, strong loan growth, improving asset quality, and balance sheet growth.
Domestic brokerage firm Prabhudas Lilladher maintained its ‘buy’ rating on the stock and raised the target price to ₹1,425 from ₹1,375. Likewise, ICICI Securities also retained its ‘buy’ rating on the stock, revised the target price to ₹1,450, and increased its loan growth estimate to 12% YoY for FY26E.
Bernstein has an ‘outperform’ rating on Axis Bank stock with a target price of ₹1,250 per share. HSBC, keeping its ‘buy’ rating, lifted its target price to ₹1,460 from ₹1,340, citing strong loan growth, stable margins, and robust asset quality.
Nomura issued a ‘buy’ call on Axis Bank with a target price of ₹1,440 per share, describing the bank’s second quarter performance as strong on core operations.
Jefferies also has a ‘buy’ rating and raised the target price to ₹1,430 per share. It said Axis Bank’s profit came in ahead of estimates, supported by stable NIMs and healthy loan and deposit growth of 12% and 11%, respectively.
Key quarterly metrics
The lender reported a 26% YoY drop in its net profit at ₹5,090 crore. Sequentially too, net profit declined 12.3% from ₹5,806 crore reported in the June quarter.
The bank’s profit during the quarter was impacted by an additional one-time standard asset provision of ₹1,231 crore for two discontinued crop loan variants, following an RBI advisory after its FY25 annual inspection.
The bank’s net interest income (NII), the difference between interest earned from lending activities and interest paid to depositors, stood at ₹13,745 crore, marking a 2% year-on-year rise. This was higher than analysts’ expectation of a 3% YoY decline, while the bank’s net interest margin (NIM) also exceeded estimates. coming in at 3.73%.
Its asset quality improved with gross NPAs at 1.46 per cent and net NPAs at 0.44 per cent.
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