Axis Bank Surges 4%, Nears Record High on Strong H2 Outlook
Overview
Axis Bank shares jumped 4% to a 52-week high near ₹1,308.40, buoyed by anticipation of improved H2FY26 performance. Brokerages like ICICI Securities and BNP Paribas maintain 'BUY' ratings, citing stable asset quality, margin recovery prospects, and strategic growth initiatives, with target prices suggesting significant upside.
Stocks Mentioned
Axis Bank Stock Soars
Axis Bank's stock price surged nearly 4% during Wednesday's intraday trading on the BSE, reaching a 52-week high of ₹1,308.40. The rally was fueled by expectations of robust performance in the second half of the financial year 2025-26. The private lender's shares are now approaching their all-time record high of ₹1,339.55, set on July 12, 2024.
Brokerages Bullish on Upside
Analysts at ICICI Securities highlighted that Axis Bank's management reiterated its through-cycle Net Interest Margin (NIM) guidance of 3.8%. They anticipate margins will bottom out in Q3FY26, supported by cash reserve ratio (CRR) release and deposit cost normalization. Credit costs declined sharply by 65 basis points quarter-on-quarter to 73 basis points in Q2FY26, indicating a full normalization of the Q1 technical provisioning impact. ICICI Securities maintains a 'BUY' rating with a revised target price of ₹1,420.
BNP Paribas India views Axis Bank as well-positioned to capture significant market share during the anticipated credit upcycle. Factors supporting this view include strong capital buffering, a robust deposit franchise, a focus on digital transformation, the acquisition of Citigroup's India retail portfolio, and expansion into rural and small business banking. They have a 'BUY' rating with a target price of ₹1,660 per share.
Outlook and Valuations
Motilal Oswal Financial Services, however, maintained a 'NEUTRAL' rating. They project loan growth to accelerate to mid-teens, credit costs to trend lower, and NIMs to recover towards 3.8%, targeting a Return on Assets (RoA) of 1.6-1.8% over the medium term. Despite some uneven earnings progression, Axis Bank is navigating the final phase of margin and asset-quality normalization. Analysts noted that while Q3FY26 might see margin pressure and agri-seasonality effects, earnings progression is expected to improve thereafter as asset quality stress normalizes and margins recover in FY27. The stock trades at an attractive 1.7x 1-year forward Price-to-Book Value (P/BV) relative to a sustainable Return on Equity (ROE) of 14-16%.
