The Axis Bank share price closed down 3% after a disappointing Q4. The brokerage firm JM Financial has maintained a ‘Buy’ rating on Axis Bank with a revised target price of Rs 1,575. This indicates a potential upside of around 15% from current levels.
According to the brokerage report, while profitability pressures remain, the bank’s steady growth in loans, improving asset quality, and stable deposit base continue to support its outlook.
Let’s take a look at the key details why the brokerage is bullish on this stock and what is the rationale behind it –
JM Financial on Axis Bank: Growth strong, profitability under pressure
JM Financial, in its report, noted that Axis Bank’s Q4FY26 performance was uneven. While the bank saw strong business growth, its core profitability lagged expectations.
As per the brokerage report, “Profit After Tax is flat YoY/+9% QoQ, supported by lower provisions and reversal of excess tax provisions.”
However, the core operating performance was weaker. According to the brokerage report, “core pre-provision operating profit undershot our estimate due to muted fee income, treasury loss and elevated opex.”
JM Financial on Axis Bank: Loan and deposit growth remain key positives
One of the biggest positives for Axis Bank continues to be its steady growth in loans and deposits. According to the brokerage report, “Advances grew strongly, up 19% YoY/6% QoQ, led by corporate and SME.”
On the liabilities side as well, growth remained healthy. As per the brokerage report, “deposits rose 14% YoY/6% QoQ with healthy CASA traction.”
JM Financial on Axis Bank: Margins under pressure despite growth
Even though loan growth remains strong, margins are facing pressure. According to JM Financial report, “NII grew only 5% YoY as calculated NIM decreased 8bps QoQ.”
As per the brokerage report, “asset-side repricing and wholesale-led growth” have continued to impact spreads.
JM Financial on Axis Bank: Asset quality improves, risk buffers strengthened
A key positive highlighted by the brokerage is the improvement in asset quality. According to the brokerage report, “Asset quality remained the key positive with GNPA/NNPA improving 17bps/6bps QoQ.”
The bank has also taken a cautious approach by setting aside additional provisions. As per the brokerage report, “The bank created an additional standard asset provision of Rs 20 billion as a prudential buffer.”
JM Financial on Axis Bank: Why the brokerage still sees upside
JM Financial believes Axis Bank’s fundamentals remain stable. According to the brokerage report, “Axis Bank’s valuation is supported by sustained strength of its deposit franchise, improving asset quality, stronger balance sheet conservatism.”
The brokerage also expects gradual improvement in earnings going forward. As per the report, “improving liability quality, and lower normalised credit costs shall support earnings recovery.”
Additionally, it has factored in better earnings estimates going ahead. According to the brokerage report, “raise the FY27 EPS by 10%.”
What investor need to watch
According to the brokerage report, the bank is expected to deliver stable returns over the next few years, with return on assets (RoA) and return on equity (RoE) projected at 1.6% and 14%, respectively.
Overall, the brokerage maintains its ‘Buy’ stance.
Disclaimer: This report contains market analysis and a specific price target for Axis Bank based on third-party brokerage research. Such projections are subject to market volatility and institutional risks; they do not constitute an offer to buy or sell securities. Readers are advised to consult a SEBI-registered investment advisor before making any financial decisions based on these valuations.
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