Axis Bank Share Price Falls Sharply As Analysts Cut Earnings Estimates Post Q3 Results

Axis Bank Ltd.'s share price hit the lowest level in over one year as analysts and brokerages cut earnings estimates. The near-term growth outlook looks bleak after a rise in slippages and rising credit cost weighed on the private lender's third-quarter performance.

During October–December, Axis Bank's overall slippages rose over 2.1% while credit cost rose over 85 basis points which surprised the Street negatively, according to Citi Research. Private lender's deposit and advance growth slowed below the brokerage's expectations. The brokerage cut earnings estimates by 3–4% for financial year 2025 and 2027.

Credit growth will slow down with sharper deceleration in MFI, personal loan, and cash credit and weak corporate credit demand.

Motilal Oswal Financial Services cut earning estimates by 4–5% for financial year 2026 and 2027. The brokerage estimates return on asset and return on equity to be at 1.6% and 14.1%, respectively, for next two financial year.

Axis Bank's near-term growth outlook, asset quality performance may remain under pressure due to stress in the macroeconomic environment, according to Motilal Oswal Financial Services. However, the brokerage expects limited downside risk from the current level.

Macquarie says cloud of uncertainty looms ahead for Axis Bank Ltd. Unsecured and agricultural delinquencies contributed to higher provisions. Low deposit growth restricts loan growth.