AXISBANK

Axis Bank’s ED Subrata Mohanty and CFO Puneet Sharma, to understand the business/profitability outlook, more so in view of the recent monetary policy. The management believes RBI’s policy stance is credit-positive, though it is too early to upgrade system growth estimates; also, the mgmt resisted giving guidance for FY26. For the medium-to-long term, it expects growth to be 300-400bps above the system growth. The bank managed its margins aptly in FY25. The recent sharp rate-cut could exert pressure on margins of most banks in 1HFY26 (more so in 2Q), as also for Axis Bank, although liability re-pricing should help partly recoup margins in 2H. The bank expects reported NIM to settle at ~3.8% (vs 4% in FY25) in the medium term. Stress in the credit card portfolio has eased; however, the strain would take some time to allay in MFI/PL which, along with the bank’s prudent recognition/provisioning policy on unsecured loans, could keep LLP elevated in the near term. We fine tune our earnings estimate (1% snip), while retaining BUY on Axis, given attractive valuations; our TP is unchanged at Rs1,400 (we value the SA bank at 1.7x FY27E ABV and subs at Rs125/sh). We believe the bank’s next level of re-rating will be contingent on further growth acceleration/management stability.