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Axis Bank share price crashed over 7% in early trade on Friday after the private lender disappointed Dalal Street investors with weak Q1 results. Axis Bank shares fell as much as 7.4% to ₹1,073.95 apiece on the BSE.

Axis Bank reported a 3.8% drop in its net profit for the fiscal first quarter ended June 2025 to ₹5,806.14 crore from ₹6,034.64 crore in the year-ago period.

The net interest income (NII) in Q1FY26 rose 0.8% to ₹13,560 crore from ₹13,448 crore, year-on-year (YoY). Net Interest Margin (NIM) during the quarter was at 3.80% as against 3.97% in the previous quarter and 4.05% in the year-ago period.

Asset quality deteriorated with gross non-performing asset (NPA) ratio rising to 1.57% as on June 30, 2025, from 1.28% as on March 31, 2025. Net NPA ratio of the bank increased to 0.45% in Q1FY26, from 0.33% sequentially.

Axis Bank’s weak Q1 results disappointed Dalal Street investors, with analysts downgrading the stock and cutting earnings estimates and share price targets. Here’s what analysts have to say on Axis Bank Q1 results and Axis Bank share price:

Axis Bank undershot on Q1FY26 NIM and reported a big miss on asset quality. Slippage of ₹82 billion or 3.1% is 72% higher QoQ. Even core slippage and credit cost rose QoQ and YoY, and are higher than normalised and peers. NIM fell 17 bps QoQ even when Axis Bank has been the slowest in passing rate cuts among peers, said Nuvama Institutional Equities.

The brokerage firm downgraded Axis Bank shares to ‘Hold’ on repeated volatility in asset quality and growth. It also cut FY26E and FY27E EPS estimates by 5% and 6%, respectively, on an already below-consensus base, and slashed Axis Bank share price target to ₹1,180 apiece from ₹1,400 earlier.

Axis Bank has more catch-up to do on rate cuts than peers; the stock’s discount to peers shall widen given volatility, it said.

Motilal Oswal Financial Services noted that Axis Bank’s asset quality deteriorated as slippages came in higher due to stringent classification of loans (technical impact), with Gross NPA and Net NPA ratios also increasing.

It cut earnings estimates for FY26 and FY27 by 8.6% and 5.7%, factoring in higher credit cost and margin pressure. It estimates FY27E RoA and RoE of 1.6% and 14.6%. The brokerage firm retains ‘Neutral’ rating on Axis Bank shares with a target price of ₹1,250 per share.

IIFL Capital forecasts Axis Bank’s FY26 net profit to decline 12% YoY, but rebound strongly in FY27, which implies FY26-28E earnings CAGR of 11%.

Axis Bank share price trades at 1.4x FY27E P/B, which is at ~40% discount to the peer banks, and thus provides a floor to the stock price. However, with impending NIM pressure, still elevated credit costs in 2Q and 3Q, and inconsistent execution, it is difficult to make a case for outperformance relative to the peers, IIFL Capital said.

It cuts estimates by 4-8% and Axis Bank share price target to ₹1,280 apiece from ₹1,370 earlier.

Axis Bank share’s post-result gap-down has turned into an open-low setup, and the stock is showing signs of a rebound, noted Anshul Jain, Head of Research at Lakshmishree Investments.

“This price action suggests that buyers are stepping in to absorb the decline. The immediate upside potential lies in the gap-fill, with the upper end of the gap placed at ₹1,151. While volumes during the gap-down were high, the lack of continued selling indicates accumulation rather than panic, pointing toward a possible short-term recovery,” Jain said.

Axis Bank share price has fallen over 8% in one month and the stock has risen 12% in the past six months. Over the past one year, Axis Bank shares have declined 15%, while the stock has gained 63% in three years. Axis Bank share price has jumped by a staggering 157% in the past five years.

At 9:25 AM, Axis Bank share price was trading 4.31% lower at ₹1,109.90 apiece on the BSE.

Disclaimer: The views and recommendations made above are those of individual analysts or broking companies, and not of Mint. We advise investors to check with certified experts before making any investment decisions.

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