Axis Bank Shares Rally Despite Q2 Profit Hitting Nine-Quarter Low — Here's Why

Shares of Axis Bank Ltd. have surged in early trade, reaching an intraday high of Rs 1,216 after the lender reported its September quarter earnings for the financial year ending March 2026, on Wednesday.

The stock is currently trading at Rs 1,198, which accounts for a gain of more than 2.5%. This compares to Wednesday's closing price of Rs 1,169.

Axis Bank reported its September quarter earnings after market close on Wednesday, with net profit seeing a 24% decline at Rs 5,090 crore - a nine-quarter low. Profit numbers missed the estimate of Rs 5,838 crore, as projected by the analysts tracked by Bloomberg.

Impact on net profit, though, was largely on account of a one-time standard asset provisioning of Rs 1,230 crore.

Provisions and contingencies of the bank surged sharply by 61% to Rs 3,547 crore in the July-September period, compared to Rs 2,204.09 crore in the corresponding period of the last fiscal.

Brokerages reacting to Axis Bank's second-quarter earnings have largely deemed it a positive quarter for the bank.

Firms such as CLSA, Bernstein and HSBC have pointed out the lender's improving asset quality, strong loan growth and margins.

Brokerages largely believe it was a strong quarter for Axis Bank, as far as operational metrics are concerned.

The only real negative was the one-time standard asset provisioning, which, in turn, impacted the lender's profitability for the quarter.

The shares of Axis Bank are trading with a relative strength index of 59, which indicates neutral market sentiment.

Forty-one out of the 51 analysts tracking L&T have a 'buy' rating on the stock, ten recommend a 'hold'. There are no sell ratings on the counter, according to Bloomberg data. The average of 12-month analyst price targets is Rs 1,356, which implies a potential upside of 11.5%.