Axis Bank announced that the Reserve Bank of India has approved the extension of Subrat Mohanty's tenure as Executive Director for three years. According to The Hindu BusinessLine, the board had approved his re-appointment on January 27, 2026, with the extended term effective from August 17, 2026, to August 16, 2029. The RBI's approval came through a letter dated April 29, 2026, providing continuity in leadership for the private sector lender. This extension ensures stability at the senior management level during a period when the bank is navigating challenging market conditions.
Axis Bank shares declined 3% in Monday's trading session, closing at ₹1,324.2 despite the bank's Q4 results receiving positive analyst feedback. According to The Economic Times, the broader benchmark Nifty 50 was up 0.8% at close, highlighting the divergent performance between the banking stock and the overall market. The stock's underperformance came despite 94% of analysts covering Axis Bank maintaining 'Buy' ratings and Bloomberg consensus implying an average upside of about 19.5% in the next year. Among large brokers, Citi, CLSA, HSBC, Jefferies, JP Morgan, Nomura and UBS hiked their targets on the stock post results while maintaining positive stances.
For the March quarter, net profit declined marginally to ₹7,071 crore from ₹7,118 crore reported in the same period last year, reflecting a 0.64% decline year-on-year. As reported by Choice International, interest income for Q4FY26 rose 4.7% year-on-year to ₹32,724 crore from ₹31,243 crore in the corresponding quarter of the previous financial year. Interest expenses also increased 4.7% YoY to ₹18,267 crore, against ₹17,432 crore in Q4FY25. The net interest margin came in at 3.62% for the quarter, while net interest income stood at ₹14,457 crore, up 5% year-on-year. This decline was primarily attributed to a ₹606 crore trading loss and elevated operating expenses, which offset the 5% rise in net interest income.
The bank's total provisions jumped 139% year-on-year to ₹3,522 crore from ₹1,359 crore, with a significant portion of ₹2,001 crore representing a one-time buffer created to safeguard against potential stress in loan accounts due to geopolitical uncertainties. According to The Economic Times, West Asia-linked provisions rose sharply, up 56% sequentially and 150% year-on-year, indicating a more cautious stance relative to peers. As reported by Ashika Stock Broking, this conservative approach was driven by management's decision to conservatively reallocate most of the tax benefit to strengthening provisions (₹20 billion) on an identified pool of standard assets, leading to higher credit costs despite improving asset quality. The bank emphasized that this provisioning was precautionary and did not reflect adverse credit trends across the loan or investment portfolio.
Despite the profit decline, the bank demonstrated strong business growth with advances rising 19% year-on-year to ₹12.34 lakh crore. As reported by LiveMint, retail loans contributed 55% of the total book, while secured loans accounted for around 73%. Deposits grew 14% year-on-year to ₹13.36 lakh crore, though the bank acknowledged the need to narrow the gap between credit and deposit growth. Asset quality metrics showed significant improvement with gross NPA ratio declining to 1.23% from 1.40% in the previous quarter, while net NPA ratio eased to 0.37% from 0.42%. The improvement was supported by lower credit costs and easing stress in the unsecured portfolio, helping improve momentum in higher-yielding assets.
Despite the weak quarterly performance, brokerages remain cautiously optimistic about Axis Bank's prospects. Motilal Oswal has maintained a Neutral rating with a target price of ₹1,475, indicating a potential upside of 8%. The brokerage noted that credit costs declined during the quarter, supported by easing stress in the unsecured portfolio, and the bank continues to target medium-term loan growth of around 300 basis points above industry levels. JM Financial has maintained its Buy rating with a revised target price of ₹1,575, implying a potential upside of 15.3%, citing the bank's continued strength in deposit franchise and improving asset quality. Elara Capital has maintained its Buy rating with an upward revised target price of ₹1,629, describing the quarter as mixed with strong asset quality trends but weaker core operating performance. Macquarie maintained its 'Outperform' rating with a price target of ₹1,500, noting that credit cost could decline in coming quarters if the West Asia conflict subsides and provides further cushion to ROA. The bank's valuation is based on a sum-of-the-parts methodology rolled forward to FY28, with any re-rating dependent on consistency in performance.
