Axis Bank share price is on a roll today. It is up nearly 5% intra-day. The December-quarter performance has prompted a fresh round of commentary from brokerages, after the lender reported higher-than-expected profit driven by stronger net interest income and lower operating expenses. While margins declined during the quarter due to a change in loan mix, analysts tracking the bank pointed to improving earnings delivery, stable asset quality, and moderation in credit costs. Brokerage firms, including JM Financial, Motilal Oswal, Emkay Research, and Nuvama Institutional Equities, said Axis Bank’s Q3FY26 numbers showed better control on costs and steady balance sheet metrics, even as retail loan growth remained muted and net interest margins moved lower.
Motilal Oswal on Axis Bank: ‘Neutral’
Motilal Oswal Financial Services has maintained a ‘Neutral’ rating on Axis Bank with a target price of Rs 1,400, which implies an upside of around 11% from the reference price of Rs 1,258. The brokerage said Axis Bank reported a net profit of Rs 6,490 crore for Q3FY26, up 28% quarter-on-quarter, supported by lower provisions and controlled operating expenses. Net interest income grew 5% year-on-year and 3.9% sequentially, while net interest margin declined 9 basis points quarter-on-quarter to 3.64%, in line with expectations.
Motilal Oswal said provisions were lower than its estimate due to a small reversal in standard asset provisions. Loan growth remained healthy at 14.2% year-on-year, with growth seen across retail, corporate, and SME segments.
“NIMs contracted 9bp QoQ, in line with expectations, and we continue to expect margins to bottom out over 4QFY26 and 1QFY27,” Motilal Oswal said.
JM Financial on Axis Bank: ‘Buy’
JM Financial Institutional Securities has reiterated its ‘Buy’ rating on Axis Bank and increased its target price to Rs 1,550 from Rs 1,475 earlier, indicating an upside of over 23% from the reference price of Rs 1,258. JM Financial said Axis Bank reported profit growth of around 28% quarter-on-quarter, which lifted return on assets to about 1.5% and return on equity to around 13% in Q3FY26.
Loan growth stood at 14% year-on-year, driven by corporate and SME segments, while deposits grew 15% year-on-year. Net interest income rose 5% year-on-year and 4% quarter-on-quarter, even as the calculated net interest margin declined 4 basis points sequentially. The brokerage noted continued improvement in asset quality, with gross NPAs declining to 1.47% and credit costs moderating to 0.8%, down 50 basis points from the previous quarter.
“Asset quality continued to strengthen with GNPA/NNPA declining 7bps/1bp at 1.47%/0.44%, credit cost at 0.8%,” JM Financial said.
Nuvama Institutional Equities on Axis Bank: ‘Buy’
Nuvama Institutional Equities has upgraded Axis Bank to ‘Buy’ and set a target price of Rs 1,500, citing a strong earnings beat and better operating metrics. Nuvama said Axis Bank reported a 10% beat on profit after tax, driven by higher net interest income, lower credit costs, and a sharp reduction in operating expenses.
Core pre-provision operating profit grew 9% quarter-on-quarter, while net interest income growth during the quarter was among the strongest in the sector. Slippages rose 6% sequentially, but credit costs came in at 76 basis points, lower than consensus estimates.
“Axis reported a 10% beat on PAT driven by a beat on NII and credit cost and a big beat on opex,” Nuvama Institutional Equities said.
PL Capital on Axis Bank: ‘Buy’
PL Capital has retained a ‘Buy’ rating on Axis Bank and raised its target price to Rs 1,500 from Rs 1,425 earlier, implying an upside of about 19% from its reference price of Rs 1,258. According to PL Capital, Axis Bank’s core profit after tax for the quarter exceeded its estimates by 9.5%, led by a 3.1% higher net interest income and a 4.9% decline in operating expenses. Net interest income rose 3.9% quarter-on-quarter to Rs 14,290 crore, while staff costs declined 11% due to a lower employee base and improved productivity.
Reported net interest margin fell 9 basis points sequentially to 3.64%, which the brokerage attributed to a higher share of lower-yielding corporate loans, with the corporate book rising to 32% of advances from 29% a year ago. Asset quality remained steady, with gross NPAs at 1.4%, supported by higher recoveries and write-offs. PL Capital raised its FY27 and FY28 core profit estimates by an average of 4% and maintained its valuation multiple at 1.7 times September 2027 core adjusted book value.
“AXSB saw a good quarter as core PAT beat PLe by 9.5% due to 3.1% higher NII and 4.9% lower opex,” PL Capital said.
Emkay Research on Axis Bank: ‘Buy’
Emkay Research has retained a ‘Buy’ rating on Axis Bank and raised its target price to Rs 1,475 from Rs 1,400 earlier, implying an upside of nearly 18%. Emkay said Axis Bank delivered an 8% beat on profit after tax, helped by lower staff costs and reduced provisions, despite a sequential decline in margins.
Credit growth accelerated to 14.2% year-on-year, led by corporate and SME lending, while retail loan growth remained slower at 6.4% year-on-year. Net interest margin fell 9 basis points quarter-on-quarter to 3.64% due to changes in loan and liability mix.
Gross slippages rose to Rs 6,000 crore, largely due to seasonal agricultural stress, but improved recoveries and write-offs helped bring gross NPAs down to 1.4%.
“Lower staff cost and provisions led to an 8% beat on PAT, at Rs65bn, and RoA at 1.5%,” Emkay Research said.
Conclusion
Brokerage commentary following Axis Bank’s December-quarter results points to improving earnings delivery supported by cost control and stable asset quality, even as margins remain under pressure due to changes in loan mix. While views on valuation differ, most brokerages continue to back the stock with ‘Buy’ ratings, setting target prices in the range of Rs 1,400 to Rs 1,550, based on expectations of steady credit growth and moderation in provisions over the coming years.