Axis Bank shares slide 6% after weak Q1 results. Should you buy, sell or hold?

Axis Bank shares fell 6.4% to their day's low of Rs 1,086 on NSE on Friday, after the private lender reported a 4% year-on-year (YoY) decline in standalone net profit to Rs 5,806 crore for Q1FY26, compared to Rs 6,035 crore in the same quarter last year.

Net interest income (NII) remained flat at Rs 13,560 crore during the quarter.

Operating profit before provisions and contingencies rose 14% YoY to Rs 11,515 crore from Rs 10,106 crore. However, provisions nearly doubled, increasing to Rs 3,948 crore from Rs 2,039 crore a year earlier.


The bank’s cumulative provisions (excluding NPAs) stood at Rs 11,760 crore at the end of Q1FY26, providing a standard asset coverage of 1.12% as of 30 June 2025.

The provision coverage ratio (PCR), including specific, standard, and additional provisions, stood at 138% of gross NPAs. Credit cost (annualised) for the quarter was reported at 1.38%.

Should you buy, sell, or hold Axis Bank's stock? Here’s what brokerages say:

Antique

Antique has maintained a Buy rating on Axis Bank with a target price of Rs 1,300.

However, the brokerage flagged a miss on core parameters, noting a sharp rise in slippages and credit costs. It said the overall performance was weak in terms of margins, growth, and asset quality, which lags peers.

Antique added that a re-rating would depend on improvements in growth, asset quality, and credit cost reduction. While loan growth improved sequentially, it remains below industry levels, with retail growth muted. The brokerage expects RoA of 1.5%-1.7% and RoE of 13%-15% for FY26–27 and has cut its earnings estimates by 8% for FY26 and 4% for FY27.

Motilal Oswal

MOSL has maintained a Neutral rating on Axis Bank with a target price of Rs 1,250.

The bank’s Q1FY26 net profit of Rs 5,810 crore was down 4% YoY and broadly in line with expectations. NII was flat YoY and declined 2% sequentially to Rs 13,560 crore. NIMs declined 17 basis points sequentially to 3.80%. Provisions surged 190% QoQ to ₹3,950 crore, which was 49% above estimates.

MOSL highlighted that other income grew 25.5% YoY and 7.1% QoQ to Rs 7,260 crore, beating estimates by 9%. Loan book growth came in at 8.1% YoY and 1.8% QoQ, while deposit growth was 9.3% YoY but fell 1% sequentially. The CASA ratio declined by 100 basis points to 40%, and fresh slippages rose sharply by 71% QoQ to Rs 8,200 crore.

(Disclaimer: Recommendations, suggestions, views and opinions given by the experts are their own. These do not represent the views of the Economic Times)