Axis Bank experienced a notable drop in its share price on Monday, July 20, 2026, closing down 5.54% at Rs 1,255.25. This downturn occurred despite the third-largest private bank announcing a robust 23% increase in its first-quarter net profit. The primary catalyst for the market's negative reaction was the bank's Net Interest Margin (NIM), which fell short of investor expectations.
The bank's NIM slipped by 16 basis points quarter-on-quarter, settling at 3.46%. This figure disappointed market participants, drawing parallels to HDFC Bank, which also saw its shares decline by approximately 5% after reporting a similar NIM miss. Axis Bank's management has outlined a strategy to improve its NIM, targeting a recovery to 3.8% within the next 12 to 15 months.
Brokerage Targets and Analyst Views
Despite the immediate share price dip, the consensus target price for Axis Bank shares, compiled from 32 brokerages, stands at Rs 1,579.65. This suggests a potential upside of 25% from its current levels.
- UBS: Maintained a 'Buy' rating with a target of Rs 1,620.
- HSBC: Set a target price of Rs 1,600.
- JPMorgan: Valued the stock at Rs 1,590.
- CLSA: Assigned a target of Rs 1,550.
- Nomura: Pegged the stock at Rs 1,545.
- Investec: Set a target of Rs 1,540.
- Macquarie: Provided a target of Rs 1,490.
- Jefferies: Stood out with a bullish target of Rs 1,700.
Analysts noted that the Q1 profit beat was largely driven by higher 'other income' and reduced provisions. The sequential uptick in gross Non-Performing Assets (NPAs) to 1.3% was attributed to seasonally higher agri NPAs, which are expected to ease in subsequent quarters.
Valuation and Outlook
JM Financial observed that while Axis Bank's growth remains healthy, its profitability continues to lag that of ICICI Bank, justifying a valuation gap between the two. The brokerage maintained a 'BUY' rating with an unchanged target price of Rs 1,575, valuing the bank at 1.7x FY28E BVPS, projecting an average Return on Assets (RoA) of 1.5% and Return on Equity (RoE) of 14% over FY27–28E.
Nuvama analysts believe Axis Bank is well-positioned to benefit from FCNR (Foreign Currency Non-Resident) flows, which could help restore margins. This, coupled with lower loan loss provisions (LLP), is expected to drive RoA from 1.4% in FY26 to 1.6–1.8% over FY27–29E. Consequently, Nuvama retained its 'BUY' rating with a target of Rs 1,650, citing improving return ratios and lower valuations.
Ashika Stock Broking highlighted that Axis Bank's Q1 operating performance, including Net Interest Income (NII), Pre-Provision Operating Profit (PPOP), and Profit After Tax (PAT), fell below their estimates by 3-14%. However, they acknowledged healthy business momentum, strong growth in advances and deposits, and resilient asset quality supported by robust provision buffers.
Arihant Capital revised its rating to “Accumulate” with a target price of INR 1,499. They emphasized the bank's strong capital position, healthy provision buffers, and diversified business franchise, which position it well for sustainable growth and stable asset quality amidst an uncertain macroeconomic environment. The brokerage awaits clearer signs of growth momentum for further revisions.