Axis Bank shares closed 4% higher at ₹1,169 after its September quarter results. In Q2, the bank's profit decreased by 26% to ₹5,090 crore, while net interest income and asset quality were better than expected. Jefferies set a target price of ₹1,430 for the share, Motilal Oswal ₹1,300, and Bernstein ₹1,250.
Axis Bank Share: Axis Bank shares closed 4% higher at ₹1,169 after its September quarter results. In Q2 of FY 2025-26, the bank's profit decreased by 26% to ₹5,090 crore, while net interest income and operational parameters were better than expected. Jefferies gave a ‘BUY’ rating with a target price of ₹1,430 for the share, Motilal Oswal set a target of ₹1,300, and Bernstein ₹1,250, indicating potential returns for investors.
Details of Quarterly Results
Axis Bank's net interest income increased by 2% year-on-year to ₹13,744 crore, compared to ₹13,483 crore in the same period last year. Operating income in the July-September quarter decreased by 3% to ₹10,413 crore. As of September 2025, the bank's Gross Non-Performing Assets (Gross NPA) stood at 1.46% and Net NPA at 0.44%.
The main reason for the decline in the bank's profit was a one-time provisioning of ₹1,231 crore. This provisioning impacted the bank's profitability. However, the bank's other financial parameters were better than expected.
Brokerage Rating Update
Global brokerage Jefferies has given a ‘BUY’ rating on Axis Bank. Jefferies has raised the target price for the stock to ₹1,430. This indicates a potential return of over 22% for investors. According to Jefferies, the provisioning mandated by the RBI had a negative impact on the bank. However, reduced slippages, improved core credit costs, and better core trends make the stock's current valuation attractive.
Motilal Oswal has maintained a ‘Neutral’ rating on the bank, providing a target price of ₹1,300. This is approximately 11% higher than the current share price. Bernstein has set a target price of ₹1,250 with an ‘Outperform’ rating. According to the brokerage, reduced slippages and improved card additions indicate that asset quality is now close to its bottom.
Provisioning and Margins
The one-time provisioning made during the quarter impacted the bank's net profit. The bank's margins declined by 7 basis points quarter-on-quarter. According to management, the Net Interest Margin could reach its bottom in the third quarter.
Improvement in Asset Quality
An improvement in the bank's asset quality was observed. Slippages decreased, and both GNPA and NNPA ratios improved. This improvement was due to a reduction in both core and technical slippages. The brokerage believes that credit costs remained lower compared to previous quarters, but this trend might reverse in the coming quarters.
