Axis Bank shares tumbled 6.36% on Friday after the private sector lender reported a weaker-than-expected performance for the June quarter, prompting a wave of caution from leading brokerages.
The sharp decline in the stock price reflects investor concerns over deteriorating asset quality and rising credit costs, which overshadowed the bank's long-term growth narrative.
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For the first quarter of FY26, Axis Bank posted a standalone net profit of Rs 5,806 crore, marking a 4% year-on-year decline. The figure fell short of Bloomberg's consensus estimate of Rs 6,375 crore and was significantly lower than the Rs 7,117 crore reported in the previous quarter. The miss was largely attributed to a surge in provisions and slippages, driven by technical reclassifications in its loan book.
Provisions and contingencies soared 94% year-on-year to Rs 3,948 crore, while gross non-performing assets rose to 1.57% from 1.28% in the March quarter. Net NPAs also increased to 0.45%, up from 0.33%.
Brokerages including Jefferies, Citi, Nuvama, Systematix, and Motilal Oswal responded by trimming their price targets and earnings estimates. While some have a 'neutral' or 'hold' stance, they flagged near-term risks stemming from margin compression and elevated slippages. Nuvama, for instance, downgraded the stock to “hold” and cut its target to Rs 1,180, citing asset quality concerns
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