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Investing.com - CLSA has raised its price target on Axis Bank Ltd. (NSE:AXSB) to INR1,400 from INR1,350 while maintaining an Outperform rating following the bank’s second-quarter fiscal 2026 results.
The bank’s Q2FY26 profit before tax, adjusted for one-offs, exceeded CLSA’s estimates by 3-4%, primarily driven by better net interest income and pre-provision operating profit. CLSA analyst Piran Engineer described the quarter as a "change in trend" for the bank.
Growth accelerated in both loans and deposits, which grew at low-double digit rates compared to high-single digits in previous quarters. Core slippages, excluding technical factors, were lower than in recent quarters.
Axis Bank took a one-time standard asset provision of Rs12 billion for its crop loan portfolio, which the bank plans to release before March 2028. Despite this provision, margins declined only 7 basis points (11 basis points excluding one-offs), helped by a sharp decline in cost of deposits.
CLSA’s FY26-28 profit after tax estimates remain largely unchanged, with the price target increase primarily reflecting a roll-forward to September 2027 as the valuation timeframe.
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