Axis Bank Hit by NIM Reality Check as Citi Sees Limited Upside

slipped about 4% to an intraday low near ₹1,231 after Citi Research reiterated its Neutral rating and signalled virtually no upside, pegging the target price at ₹1,285—broadly where the stock was trading pre-cut. The trigger was management’s revised guidance that net interest margins will now bottom out only in Q4 or early Q1, versus the earlier expectation of a Q3 trough.​ Citi flags a “shallow, C‑shaped” margin recovery, with NIMs expected to gradually climb to around 3.8% over the next 15–18 months from 3.73% in Q2, implying that earnings upgrades are unlikely in the near term. Fee-to-assets optimisation also remains constrained for now, given the current business mix, which further limits levers for a quick profitability reset.​ On the positive side, management highlighted easing stress in credit cards, stabilisation in the personal loan book and no early-warning signals from export-oriented MSMEs, indicating asset quality is holding up even as margins stay under pressure. Corporate loan momentum and working-capital utilisation are improving, but in the current market, investors are clearly prioritising NIM trajectory over growth, explaining the sharp price reaction to Citi’s “no-upside” stance. Source: The Economic Times No Recommendations