Axis Bank share price tumbles over 7% post weak Q1 FY26 earnings. Analysts downgrade stock amid asset quality concerns and NIM pressure.
Axis Bank Share Price Falls 7% Post Q1 FY26 Results: Buying Opportunity or Red Flag?
Mumbai, July 18, 2025 — Shares of Axis Bank crashed over 7.4% in early trade on Friday, hitting ₹1,073.95 on the BSE, after the private sector lender reported disappointing Q1 FY26 results. The bank’s earnings fell short of analyst expectations, leading to a series of downgrades and price target cuts by top brokerages.
While some experts see the correction as a technical opportunity for accumulation, others caution about continued volatility due to asset quality pressures and margin compression.
📊 Axis Bank Q1 FY26 Results: Key Financial Highlights
Weak Profitability Metrics
- Net Profit: ₹5,806 crore (▼3.8% YoY)
- Q1FY25 Profit: ₹6,034 crore
- Missed analyst consensus expectations by a fair margin
Margins Under Pressure
- Net Interest Income (NII): ₹13,560 crore (▲0.8% YoY)
- Net Interest Margin (NIM):
- Q1FY26: 3.80%
- Q4FY25: 3.97%
- Q1FY25: 4.05%
Asset Quality Deterioration
- Gross NPA: 1.57% (vs. 1.28% in Q4FY25)
- Net NPA: 0.45% (vs. 0.33% sequentially)
- Slippages: ₹8,200 crore, a 72% QoQ spike
“The technical slippages and upgrades impacted reported profitability by ₹614 crore,” said Axis Bank in its earnings release.
📉 Axis Bank Share Price Performance: A Volatile Ride
| Timeframe | Change in Axis Bank Share Price |
|---|---|
| 1 Month | ▼8.2% |
| 6 Months | ▲12% |
| 1 Year | ▼15% |
| 3 Years | ▲63% |
| 5 Years | ▲157% |
As of 9:25 AM on July 18, Axis Bank shares were trading 4.31% lower at ₹1,109.90.
🏦 Analyst Reactions to Axis Bank’s Q1 FY26 Performance
🔻 Nuvama Institutional Equities
- Rating: Downgraded to Hold
- Target Price: ₹1,180 (earlier ₹1,400)
- Comment:
- “Core slippages and credit costs rose QoQ and YoY. Asset quality volatility is concerning.”
🟡 Motilal Oswal
- Rating: Neutral
- Target Price: ₹1,250
- Estimate Cuts:
- FY26 EPS: ▼8.6%
- FY27 EPS: ▼5.7%
- Comment:
- “Margins are under pressure, and asset quality deterioration stems from stricter classifications.”
🔵 IIFL Capital
- Rating: Underweight
- Target Price: ₹1,280 (earlier ₹1,370)
- Comment:
- “With FY26E profit expected to decline 12%, a rebound is only likely in FY27. Unlikely to outperform peers.”
🟢 Bernstein
- Rating: Outperform
- Target Price: ₹1,300
- Comment:
- “Despite a weak quarter, the long-term story remains intact. But loan and deposit growth lagged.”
📈 Technical Analysis: Is Axis Bank Stock Set for a Rebound?
According to Anshul Jain, Head of Research at Lakshmishree Investments:
“The gap-down has formed an open-low setup, which often suggests short-term accumulation. With no aggressive selling after the fall, the stock might attempt to recover towards the ₹1,151 mark in the near term.”
🧐 Opportunity for Bottom Fishing? What Should Investors Know
While the recent decline reflects fundamental weaknesses in Q1 results, some investors may see value in Axis Bank’s longer-term growth potential:
✅ Positive Indicators
- Strong 5-year stock performance (▲157%)
- Still trades at 1.4x FY27E Price-to-Book (P/B)—a ~40% discount to peers
- Robust franchise with improving digital capabilities
❌ Risks to Watch
- Further NIM compression expected
- Elevated credit costs in Q2 and Q3 FY26
- Uncertainty in asset quality trends
❓ FAQs About Axis Bank Share Price and Q1 Results
1. Why did the Axis Bank share price fall sharply after Q1 FY26 results?
Because the bank’s net profit declined 3.8% YoY, and asset quality worsened. Analysts also downgraded the stock due to margin and credit cost pressures.
2. What are the key risks for Axis Bank investors?
Margin compression, high credit costs, and volatility in asset quality remain key concerns for the next few quarters.
3. Is this a good time to buy Axis Bank Share?
Some analysts see a technical buying opportunity due to the stock’s discount to peers, but most recommend caution due to short-term headwinds.
4. What is Axis Bank’s share price target after Q1 results?
Brokerage targets range from ₹1,180 to ₹1,300 per share, depending on future asset quality and margin performance.
5. What is the long-term growth potential of Axis Bank stock?
Despite near-term volatility, the stock has delivered strong multi-year returns, up 157% in five years, and retains long-term upside with execution improvement.
🗣️ Final Thoughts: Axis Bank – Watchful Patience Required
Axis Bank’s weak Q1 FY26 numbers have sent ripples across Dalal Street. While long-term fundamentals remain intact for some, the immediate future demands cautious optimism. Investors are advised to monitor upcoming quarters for consistency in asset quality and margin stability.
✅ Call to Action
📢 What’s your take on Axis Bank’s Q1 performance?
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