Axis Bank (AXSB IN) – Q2FY27 Result Update – Falling NIM trajectory guided to reverse from Q3FY27 – BUY
Published on 18 Oct 2026
AXSB saw a mixed quarter; while NII was in-line, miss on fee/opex was offset by lower provisions. Core PPoP miss of ~6% was mainly led by opex drag due to one-time impact of INR5bn. Ex-FCNR(B), loan growth was 5.3% QoQ attributable to corporate, SME and retail. Reported NIM was down 10bps QoQ to 3.36% due to 11bps temporary drag from FCNR(B). Bank expects this decline to reverse in Q3FY27. While core earnings quality remains weaker to peers due to sharper NIM decline and one-offs, asset quality is a silver lining that continues to improve. We tweak multiple to 1.6x from 1.7x but raise TP to INR1,600 from INR 1,550 as we roll forward to Sep’28 core ABV. Retain ‘BUY’.
