Axis Bank (AXSB IN) – Q3FY26 Result Update – Earnings consistency key to re-rating – BUY
Published on 27 Jan 2026
AXSB saw a good quarter as core PAT beat PLe by 9.5% due to 3.1% higher NII and 4.9% lower opex. While NII increased by 3.9% QoQ, reported NIM fell by 9bps QoQ to 3.64% due to tilt in loan mix towards lower yielding corporate; its share increased to 32% from 29% a year ago. Opex was better led by 11% QoQ fall in staff cost; management attributed this partly to decline in employees (net decrease of 2,550 over 9MF26) and partly to increase in productivity. However, as bank is targeting a retail share of 58-60% from 55.6% as of Q3’26, opex growth could rise. Asset quality risks are abating but consistency in core earnings is a key. We raise core PAT for FY27/28E by avg. 4% due to positive change in NII/opex. We keep multiple at 1.7x on Sep’27 core ABV and increase SOTP based TP to Rs1,500 from Rs1,425. Retain ‘BUY’.
