20 Jul , 2026 By : Debdeep Gupta
Shares of Axis Bank Ltd fell 5 percent in early trade on Monday, emerging among the top losers on the Nifty 50, despite the private sector lender reporting a better-than-expected fiscal first quarter profit over the weekend. While brokerages acknowledged a strong earnings performance, they highlighted continued margin pressure and an elevated share of corporate loans as near-term concerns.
Axis Bank shares declined as much as 5 percent to Rs 1,262.10 in morning trade. The stock had gained 1.6 percent on Friday ahead of the earnings announcement, but is now down around 1 percent so far in 2026. The lender's market capitalisation stood at under Rs 3.93 lakh crore.
The bank on Saturday reported a 23 percent year-on-year rise in standalone net profit to Rs 7,114 crore for the April-June quarter, while net interest income (NII) grew 8 percent to Rs 14,646 crore. Gross non-performing assets (GNPA) improved to 1.28 percent from 1.57 percent a year earlier, while net NPA declined to 0.39 percent.
Jefferies retained its 'Buy' rating on Axis Bank stock with a target price of Rs 1,700, implying a potential upside of 28 percent from Friday's closing price. The brokerage said June quarter profit exceeded its estimates, driven by higher NII, lower credit costs and better operating expense control.
It said NII growth was supported by strong loan growth, although the higher share of corporate loans is likely to remain a drag and improve only in the second half of FY27. Jefferies added that asset quality remained strong, with credit cost staying low at 0.7 percent. It expects an improvement in retail deposit growth and fee income to support core profitability. It raised its FY27 earnings per share estimate by 2 percent while leaving FY28 and FY29 estimates largely unchanged.
Bernstein maintained its 'Outperform' rating with a target price of Rs 1,600, describing the quarter as mixed. It said robust balance sheet growth continued to be led by the corporate loan segment, helping improve NII growth. But, the improvement came at the cost of margin compression.
The brokerage added that weaker non-interest income weighed on operating performance, though disciplined cost management and lower year-on-year credit costs helped sustain healthy earnings. Bernstein also flagged a marginal deterioration in asset quality, even as overall credit metrics remained healthy.
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