Axis Bank shares surge 6% to hit highest level in 18 months as Q3 PAT rises 3% YoY. Should you buy now?

Shares of Axis Bank climbed as much as 5.8% to an 18-month high of Rs 1,333.50 on the BSE on Tuesday after the lender posted a 3% YoY rise in standalone net profit for Q3FY26. The stock was also on its course to log its biggest single-day gain in 15 months.

The lender reported a net profit of Rs 6,490 crore for the December quarter, up from Rs 6,304 crore a year earlier. Sequentially, profit after tax jumped 27% from Rs 5,090 crore in Q2FY26.

Net interest income (NII) rose 5% year-on-year (YoY) and 4% quarter-on-quarter (QoQ) to Rs 14,287 crore in Q3FY26, while the net interest margin (NIM) stood at 3.64%.


Interest income increased 4.3% YoY to Rs 32,274 crore from Rs 30,954 crore. Interest expenses also rose nearly 4% YoY to Rs 17,988 crore, compared with Rs 17,348 crore a year ago.

On the provisioning front, the bank reported Rs 2,246 crore in provisions and contingencies during the quarter, including specific loan-loss provisions of Rs 2,307 crore. Cumulative provisions, including standard and additional buffers other than NPAs, stood at Rs 13,111 crore as of Q3FY26.

These provisions translate into a standard asset coverage ratio of 1.14% as of December 31, 2025. The provision coverage ratio (PCR) remained strong at 146% of gross non-performing assets (GNPA) at the end of the quarter.

After the Q3 results, here is what brokerages are saying:

Citi: Buy | Target price: Rs 1,463

Citi has upgraded Axis Bank to Buy from Neutral and raised its target price to Rs 1,463 from Rs 1,323, citing strong core earnings and improved return metrics, with return on assets (RoA) at 1.5%.

The brokerage highlighted stable asset quality, well-contained slippages, and an improving credit cost outlook. Growth visibility has also strengthened, driven largely by the corporate and SME segments.

However, Citi flagged a sequential contraction in net interest margin (NIM) due to yield pressures, noting that management is focused on optimising net interest income (NII) and improving operating efficiency.

Citi cut its FY26 earnings estimate by 3% while leaving FY27 and FY28 forecasts unchanged. The higher target price reflects increased confidence in asset quality, steady RoA performance, and a revised valuation multiple of 1.8x FY27E price-to-book.

Bernstein: Outperform | Target price: Rs 1,480

Bernstein has reiterated its Outperform rating on Axis Bank, maintaining its target price at Rs 1,480. The brokerage said loan growth continues to be driven by non-retail segments, supported by strong deposit traction.

Despite yield compression, net interest income (NII) remained steady, the note said. On asset quality, Bernstein highlighted that credit costs were stable and overall asset quality remained broadly intact.

However, margins declined sequentially, as reductions in funding costs were insufficient to offset the slower repricing of asset yields. The report also noted that operating leverage is likely to remain limited in the near term.

For FY27, Bernstein said earnings expectations remain broadly unchanged. On valuation, the firm reiterated its preference for growth over margins.

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