Axis Bank Q2 Update: Brokerages Differ on Outlook

Axis Bank (

)reported a 38% year-on-year increase in standalone net profit to ₹7,003 crore in Q2 FY27. However, the results received a cautious market response as concerns around net interest margins, deposit growth and operating expenses weighed on sentiment. Key Q2 FY27 Highlights - Net profit increased to ₹7,003 crore from ₹5,089 crore a year earlier. - Net interest income (NII) rose 12% year-on-year to ₹15,371 crore. - Advances grew 23% year-on-year and 9% quarter-on-quarter. - Net interest margin (NIM) stood at 3.36%, down 10 basis points sequentially. - Gross NPA declined to 1.16%, while net NPA fell to 0.35%. - The net slippage ratio improved to 0.75%, indicating better asset quality. Why Are Brokerages Divided? Jefferies maintained its Buy rating with a target price of ₹1,700, citing improving asset quality, lower provisions and the potential for better margins and return on equity in the coming year. Centrum Broking retained Buy but cut its target to ₹1,530, while Dolat Capital maintained Accumulate and reduced its target to ₹1,470. Both highlighted concerns around sustainable margins and the need for stronger retail loan growth. Meanwhile, 360 ONE WAM retained Buy and raised its target to ₹1,590. My View Axis Bank’s improving asset quality and healthy loan growth are encouraging. However, the sequential decline in NIM shows that strong profit growth alone may not be enough to sustain the next phase of earnings momentum. The key monitorables are retail loan growth, CASA mobilisation, funding costs and the recovery in margins during the second half of FY27. Investors should also track how effectively the bank deploys surplus liquidity while managing credit costs. The investment case will increasingly depend on whether improving asset quality translates into stronger core profitability and sustainable returns on equity.