Geojit Investments has suggested a BUY recommendation for Axis Bank with a revised target price of Rs 1,400, implying a robust upside from current market levels. Axis Bank has been improving its asset quality and the stock has been rewarded by investors. The rationale hinges on Axis Bank’s resilient operational trajectory, sound asset quality, and accelerating digital transformation, despite short-term pressure on margins due to regulatory repo rate cuts. Investors are advised to closely observe the bank’s strategic execution and balance sheet evolution as it outpaces peer growth rates in advances, expands its customer base, and leverages agentic AI payment solutions.

Target Zones and Investor Levels

The research pegs the Axis Bank target price at Rs 1,400, calibrated at 1.8x FY27E BVPS. Stock levels critical for investors include: - CMP: Rs 1,246 - 52-Week High/Low: Rs 1,276 / Rs 934 - BUY zone: Below Rs 1,250 - Profit booking or resistance: Rs 1,400 (target recommended for 12-month holding) - Support levels: Rs 1,100 (recent historical BUY call), Rs 1,042 (previous HOLD level), and Rs 934 (52-week support)

Quarterly Performance – A Mixed Bag Amid Margin Pressure

Axis Bank’s Q2FY26 financials reflect growth across core banking but short-term pressures on margins and profitability: - Interest Income was Rs 30,970cr (up 1.8% YoY, down 0.3% QoQ) - Net Interest Income grew to Rs 13,745cr (up 1.9% YoY, up 1.4% QoQ) - Net Interest Margin stood at 3.73%, down from 3.80% in Q1FY26, impacted by repo rate transmission and lower loan yields - Pre-provision operating profit: Rs 10,413cr (down 2.8% YoY, down 9.6% QoQ) - Reported PAT: Rs 5,090cr (down 26.4% YoY)

Operational Excellence and Digital Transformation

Axis Bank’s GPS strategy (Growth, Profitability, Sustainability) is visible in both branch expansion and digitization: - Advances grew 11.7% YoY and 1.3% QoQ, outpacing sector averages. - Retail Loans expanded 6.1% YoY, Corporate Loans surged 20.3% YoY, and SME Loans rose 19% YoY. - Digital credentials reinforced by 1mn+ new credit cards issued and a healthy 37% UPI market share; agentic AI solutions for UPI and CBDC initiatives remain key differentiators. - Distribution network stands at 2,740 branches.

Robust Asset Quality and Capital Buffers

Asset quality remains robust, fortifying investor confidence in sustainable performance: - CET-1 ratio: 14.4%, overall CAR: 16.6% - Gross NPA: 1.46%, Net NPA: 0.44%, provision coverage ratio: 70% - Rs 5,012cr additional provision and one-time Rs 1,231cr asset provision buffer - Net credit cost: 0.73%; operating expenses expected to normalize over the next three quarters

Valuation Matrix and Comparative Financials

Shareholding Pattern and Institutional Endorsement

The stock retains strong institutional backing, signaling continued confidence: - Promoters: 8.2% - FIIs: 41.9% - MFs & Institutions: 42.9% - Public: 5.9% - Others: 1.2% - Promoter pledge: Nil

Risks and Regulatory Commentary

Market volatility, repo rate changes, and risk costs are key variables to monitor: - Management expects net interest margin to bottom out by Q3FY26, assuming no additional repo cuts and healthy balance sheet mix - Regulatory transmission poses near-term yield headwinds, yet Axis Bank’s proactive provisioning and digital innovation mitigate medium-term risks - The report includes SEBI, CRISIL, and internal regulatory compliance statements, highlighting transparency and investor protection protocols

Bottomline: Axis Bank Poised for Outperformance

Axis Bank emerges as a prudent BUY candidate for investors seeking balanced risk and sustainable upside in India’s private banking sector. The actionable target stands at Rs 1,400 with visible catalysts in advances growth, digital payments prowess, robust asset quality, and strong institutional support. Investors advised to accumulate below Rs 1,250 and reassess near target zones, monitoring regulatory and macroeconomic triggers.