Axis Bank Q2 Review: Motilal Oswal Maintains 'Neutral' Rating On The Stock — Check Target Price

Axis Bank reported Q2 FY26 net profit of Rs 50.9 billion (26% YoY decline, 8% miss) amid higher provisions. NII grew 1.4% QoQ (up 2% YoY) to Rs 137.4 billion (4% beat). NIMs contracted 7bp QoQ to 3.73%, aided by 4bp growth from interest reversals.

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Motilal Oswal Report

Axis Bank Ltd. reported in-line pre-provision operating profit, though net earnings were impacted by a higher onetime standard provision, as advised by the RBI. Margins contracted by modest 7bp QoQ, with management expecting net interest margins to bottom out in Q3.

Asset quality improved sequentially as gross non-performing asset/net non-performing asset 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 300bp CAGR over the medium term.

Axis 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. We finetune our earnings estimates and project FY27 RoA/RoE at 1.6%/14.4%.

Reiterate Neutral with a revised target price of Rs 1,300 (1.6x FY27E ABV).

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