Shares of Axis Bank are in focus today after the lender reported Q2 earnings that missed profit after tax estimates, according to Motilal Oswal.
The brokerage attributed the 8% miss from its profit estimates to higher provisions. Provisioning expenses came at at Rs 3,550 crore (18% higher than MOFSLe). The bank made a one-time standard asset provisioning of Rs 1231 crore following an RBI inspection related to two discontinued crop loan variants.
The brokerage has a neutral stance on the lender and fixed a target price of Rs 1,300 ( up 11% from previous close of Rs 1170.) The brokerage projects FY27 RoA/RoE at 1.6%/14.4% for the lender.
“Business growth has gained traction, with deposits expected to grow at a healthy rate, while the bank aims to outperform systemic credit growth by 300bp CAGR over the medium term. The bank has maintained its through-cycle margin guidance of ~3.8%, even as it remains watchful of further repo rate cuts in the coming months,” said the lender.
Global brokerage CLSA has an outperform call on the bank with a target price at Rs 1,400/share. PBT came 3-4% above estimates, led by stronger NII & pre provisioning operating profit (PPoP).
Q2 marks a trend shift, loan & deposit growth improved to low double-digits vs high single-digits earlier, said CLSA.
The lender projected sustainable double-digit growth in deposits and advances with digital innovation and payments leadership to anchor next-phase revenue and ROE expansion.
JPMorgan maintained a ‘Neutral’ call on Axis Bank with Price Target of Rs 1,260. NIMs for the bank were stable with corporate loans driving overall loan growth.
The brokerage said the lender’s asset quality was improving with GNPAs and slippages falling.
Jefferies maintained a buy call on the stock with a price target of Rs 1,430 from the earlier Rs 1,370. Q2 profit came above estimates and strong core operation offset impact of provisioning which impacted profit, the global brokerage said.
HSBC maintained its BUY call with a target of Rs 1,460 from Rs 1,340. Loan growth, margins & asset quality were all strong. The brokerage raised EPS estimates to 2.7-5.3% for FY26-28.
Axis Bank reported a 26% year-on-year fall in its September quarter net profit. Profit came at Rs 5090 crore in Q2 against Rs 6917.57 crore in the year-ago period. Net interest income rose 2% to Rs 13,475 crore in the September 2025 quarter. However, operating profit for Q2FY26 fell 3% to Rs 10,413 crore on a Y-o-Y basis.
Operating costs climbed 5% YOY in Q2FY26.
The lender reported Gross NPA and Net NPA levels at 1.46% and 0.44% in Q2 respectively against 1.57% and 0.45% as on June 2025. In the September 2024 quarter, gross NPA and net NPA levels stood at 1.44% and 0.34%.
The earnings were announced after market hours on Wednesday. The banking stock ended 0.65% lower at Rs 1169 against the previous close of Rs 1176.60 on BSE. Market cap of the lender stood at Rs 3.62 lakh crore. On NSE, the banking stock closed 0.37% lower at Rs 1172. .