Axis Bank shares surge nearly 3% today. The margins for the key private sector bank have come in significantly lower compared to Q1FY26 and Q2 last fiscal. According to key brokerage houses Nuvama and Motilal Oswal, the miss was driven by RBI inspection-driven standard and one-time provision of Rs 120 crore on crop loans. However, the street seems to be focussing on the strong operational performance and fuelling the surge in the share price.
Motilal Oswal on Axis Bank: Reiterate Neutral
Motilal Oswal has reiterated Neutral rating on Axis Bank with a revised target price of Rs 1,300 per share. The target implies about 11% upside for Axis Bank share price from current levels. The bank reported in-line PPoP, though net earnings were impacted by a higher one-time standard provision, as advised by the RBI. The overall margins contracted by a modest 7 basis points QoQ. The management is now expecting net interest margins to bottom out in Q3.
According to Motilal Oswal, “Asset quality improved sequentially as gross NPA/net NPA ratios improved and slippages moderated QoQ, driven by a sequential decline in both core and technical slippages. Business growth has gained traction, with deposits expected to grow at a healthy rate, while the bank aims to outperform systemic credit growth by 300 bps annually on a compounded basis over the medium term.”
Nuvama on Axis Bank: Retains Hold rating
Nuvama Wealth Management has retained its ‘Hold’ call on Axis Bank and maintained its target price at Rs 1,180. The brokerage stated that the lender posted mixed Q2 FY26 results with a beat on loan growth and NIM. Loan growth of 5% QoQ was better than expected, but driven mostly by corporate, while retail lagged. While both core and technical slippage fell on a high base of Q1, credit cost stayed high at 1.3%, the highest among large banks.
The miss was driven by RBI inspection-driven standard and one-time provision of Rs 120 crore on crop loans. “In view of the repeated volatility in credit cost and a weak loan mix, we recommend switching to ‘ICICI Bank’ for a more sustainable and less volatile business model and higher CASA growth,” said Nuvama.
Axis Bank Q2FY26 results
Axis Bank reported a drop of 26% year-over-year (YoY) in net profit, coming in at Rs 5,090 crore for the second quarter of the current financial year. In Q2 FY25, the bank posted a net profit of Rs 6,918 crore. The decline in net profit came as higher provisions for bad loans weighed on earnings.
The bank’s net interest margins shrank 3.73% in Q2 FY26 from 3.8% in Q1 FY26 and 4% in the year-ago quarter. The dent in NIM came after the Reserve Bank of India cut key lending rates by 100 basis points in 2025. Also, the private lender’s provisions and contingencies rose 61% YoY to Rs 3,547 crore.
Meanwhile, the lender’s total income increased by 1% YoY to Rs 37,595 crore in Q2FY26. The lender’s net interest income increased 2% YoY to Rs 13,745 crore.
The bank’s gross NPA stood at 1.5% in Q2 FY26, compared to 1.57% in Q1 FY26, while the net NPA came in at 0.44% quarter-on-quarter, as against 0.45% in Q1 FY26.
Axis Bank stock performance
The share price of Axis Bank has fallen 1% in the last five trading sessions. The stock has risen over 6% in the past one month and 5.4% in the last six months. Axis Bank’s stock price has given a return of 1.6% in the past one year.
