Axis Bank stock rating - Buy; Analysts positive after Q2 results; check share price targets, upside

Brokerages maintained a broadly bullish stance on Axis Bank following its Q2 FY26 results, viewing the one-time provisioning hit as temporary, and highlighting the lender’s steady operational performance, strong loan growth, and improving asset quality. Axis Bank stock ended at Rs 1,172.5 on NSE yesterday, down 0.4 percent for the day.

The private sector lender reported a 26 percent year-on-year decline in standalone net profit to Rs 5,090 crore in Q2 FY26, weighed down by higher provisions. While provisions and contingencies rose 61 percent to Rs 3,547 crore, this included a one-time Rs 1,231 crore standard asset provision following the Reserve Bank of India’s annual inspection related to two discontinued crop loan products. Axis Bank CFO Puneet Sharma said these loans are fully secured and the provision is expected to be written back by FY28 once recoveries are complete, with no divergence identified in asset quality.Axis Bank’s core business metrics remain resilient despite the near-term earnings drag, analysts said. Net interest income grew 2 percent year-on-year to Rs 13,745 crore, with the net interest margin (NIM) at 3.73 percent compared with 3.8 percent in the June quarter and 3.99 percent a year earlier. Advances grew 12 percent on-year and 5 percent sequentially, led by a 20 percent rise in corporate loans and a 6 percent increase in retail loans. The gross NPA ratio improved to 1.46 percent and net NPA to 0.44 percent, reflecting steady asset quality gains.

• Also read | Axis Bank expects slippages to stabilise, margins to bottom in Q3

Bernstein has an outperform rating on Axis Bank stock with a target price of Rs 1,250 per share. The brokerage cited sequential growth, lower slippages, and a sharp recovery in asset quality. It added that slippages have declined meaningfully quarter-on-quarter, and lower credit costs alongside rising card additions suggest that stress may be bottoming out.

HSBC gave a buy rating and raised its target price to Rs 1,460 per share on Axis Bank, citing strong loan growth, stable margins, and robust asset quality. The brokerage said the one-offs in the quarter were a drag, but an “earnings inflection” is visible. It also raised earnings per share (EPS) estimates for FY26-28 by 2.7-5.3 percent, noting that Axis Bank’s upgrade to its list of preferred picks is playing out.

Nomura issued a buy call on Axis Bank with a target price of Rs 1,440 per share, describing the bank’s Q2 FY26 performance as strong on core operations. The brokerage said technical slippages dropped sharply and that high credit cost was entirely due to the one-off standard asset provision, not indicative of fresh stress.

Jefferies also has a buy rating with a target price of Rs 1,430 per share. It said Axis Bank’s profit came in ahead of estimates, supported by stable NIMs and healthy loan and deposit growth at 12 percent and 11 percent, respectively. While the Rs 1,200-crore provision and Rs 900-crore PSLC cost weighed on quarterly performance, Jefferies said the bank’s core strength offsets these one-offs, and valuations remain attractive.

Across brokerages, analysts said that Axis Bank’s underlying trends in credit growth and asset quality remain encouraging despite near-term volatility in reported earnings. Axis Bank stock has returned about 1.7 percent in the last one year; it currently commands a price-to-earnings ratio of 13.1 and has moved within a 52-week range of Rs 933.50 to Rs 1,247.

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