$AXISBANK

Axis Bank Ltd shares fell 5 percent in early trade on Monday, making the private lender one of the top losers on the Nifty 50, despite reporting better-than-expected earnings for the June quarter over the weekend. While analysts welcomed the strong profit growth, they remained cautious over persistent margin pressure and the bank's elevated corporate loan mix. The stock declined as much as 5 percent to Rs 1,262.10 during morning trade. After gaining 1.6 percent on Friday ahead of its earnings announcement, Axis Bank shares are now down about 1 percent so far in 2026. The lender's market capitalisation stood at nearly Rs 3.93 lakh crore. For the April-June quarter (Q1FY27), Axis Bank reported a 22.5 percent year-on-year increase in standalone net profit to Rs 7,114 crore, while net interest income (NII) rose 8 percent to Rs 14,646 crore. Asset quality also improved, with the gross non-performing asset (GNPA) ratio declining to 1.28 percent from 1.57 percent a year ago, while the net NPA ratio eased to 0.39 percent. Analyst said the bank's NII growth was driven by healthy loan expansion. However, it noted that the higher share of corporate loans is likely to keep margins under pressure, with meaningful improvement expected only in the second half of FY27. The brokerage also highlighted resilient asset quality, with credit costs remaining low at 0.7 percent, and expects stronger retail deposit growth and fee income to support core profitability going forward. It raised its FY27 earnings per share estimate by 2 percent while keeping its FY28 and FY29 forecasts largely unchanged. Weaker non-interest income weighed on operating performance, although disciplined cost management and lower credit costs helped sustain healthy earnings. Meanwhile, Bernstein also pointed to a marginal deterioration in asset quality but said the bank's overall credit metrics remained healthy.