Why did Axis Bank shares fall over 4% today? Check the reason here

Synopsis: Axis​‍​‌‍​‍‌​‍​‌‍​‍‌ Bank shares fell by more than 4% after the management’s announcement that the net interest margin recovery would be delayed by two quarters.

The shares of this fourth-largest private bank in India are in focus after the management highlighted a key business development with one of the leading global brokerage firm. In this article, we will dive more into the details of it.

With a market capitalisation of Rs 3,82,582 crore, the shares of Axis Bank Ltd. reached a day’s low of Rs 1,229 per share, down over 4 percent from its previous day’s closing price of Rs 1,284.20 per share. Over the past five years, the stock has delivered a return of 102 percent, outperforming NIFTY 50’s return of 89 percent.

Reason behind the fall

Axis Bank shares took a hit after the management cited that the recovery in net interest margins (NIMs) is likely to be pushed by another two quarters. In a meeting with global brokerage CITI, Axis Bank announced that the recovery of net interest margins (NIMs) will take longer than previously expected. Earlier, it was expected that margins would hit the bottom by the quarter ending December of this year, but the bank is now anticipating this only in Q4 FY26 or Q1 of FY27, which did not excite the market.

The management of the company told the brokerage that the margins may return slowly, “C-shaped” instead of a quick rebound. The bank is anticipating NIMs of around 3.8 percent over the next 15–18 months, only slightly above 3.73 percent in Q2 FY26. 

After this update, Citi retained a Neutral rating on the stock with a target price of Rs 1,285, indicating a limited upside for the near term. Such brokerage caution usually impacts investor sentiment negatively, especially for large stocks that are part of the index. However, the brokerage has also listed some positives. Demand for corporate loans is picking up, the retail segment is showing the first signs of revival, and the credit cards and personal loans market is recovering. 

Financial Highlights

Axis Bank reported a Net Interest Income (NII) of Rs 13,745 crore in Q2 FY26, representing a minor 2 percent growth from Rs 13,483 crore in Q2 FY25. Coming to its profitability front, Axis Bank reported a net profit decline of 26 percent to Rs 5,090 crore in Q2 FY26 as compared to Rs 6,918 crore in Q2 FY25. 

Axis Bank’s total deposits grew by 11 percent to Rs 12,03,487 crore in Q2 FY26 as against Rs 10,86,744 crore in Q2 FY25. CASA deposits were Rs 4,79,007 crore, with current account deposits at Rs 1,61,283 crore and Savings Account deposits at Rs 3,17,724 crore. CASA deposits accounted for 40 percent of the total deposits as of September 30, 2025.

Coming to total advances, it has a total loan book (net advances) of Rs 11,16,703 crore, which grew by 12 percent YoY from Rs 9,99,979 crore. In this loan book, Rs 3,49,737 crore is exposed to Corporate loans, Rs 1,31,506 crore to the SME segment and the remaining Rs 6,35,460 crore is disbursed to the Retail segment.

Written by Satyajeet Mukherjee

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