Shares of Axis Bank, one of India’s largest private sector lenders, came under heavy selling pressure on Tuesday, December 16, after management commentary indicated that the recovery in net interest margins (NIMs) is likely to be delayed by two quarters.
Following this update, Axis Bank emerged as one of the worst-performing index stocks and the biggest drag. Axis Bank share price dipped as much as 4.12% to a low of ₹1231.25 on the BSE today.
Why is Axis Bank stock falling?
According to several media reports, Axis Bank's management told global brokerage Citi Research that it now expects NIMs to bottom out in either the fourth quarter of the fiscal 2025-26 (FY26) or the first quarter of next fiscal, as against the earlier expectation of Q3 FY26.
During the second quarter earnings, Axis Bank's Chief Financial Officer Puneet Sharma had told reporters that NIMs will bottom out in the December quarter, provided there is no further rate cut by the Reserve Bank.
The management told analysts at Citi Research that it now forecasts a shallow, “C”-shaped NIM trajectory, targeting a margin of 3.8% over the next 15-18 months, compared with 3.73% in the second quarter of FY26.
Against this backdrop, Citi maintained a ‘Neutral’ rating and assigned Axis Bank share price target of ₹1,285 per share.
Additionally, Citi said the corporate segment is gaining traction, driven by working capital and refinancing demand. It also sees recovery in the retail segment, supported by pent-up demand, though the sustainability of this momentum requires continued monitoring.
Stress in the cards portfolio is improving, personal loan stress is stabilising, and there is no visible stress in export-oriented MSMEs, the brokerage added.
Meanwhile, a report by Bloomberg suggested that Axis Bank is adding 50 private bankers and plans to launch several funds in a bid to tap India's growing wealthy population.
“We have now expanded to 52 cities from 30 last year to tap the growing wealth in tier 2 cities and beyond,” Arnika Dixit, head of wealth management and the affluent banking unit at the bank, told Bloomberg.
Axis Bank share price trend
Despite losses in trade today, Axis Bank share price is up 10% in the last three months and 15% in 2025 so far. Meanwhile, its yearly gains stand at 7%. On a longer time frame of five years, Axis Bank has emerged as a multibagger stock, offering 103% returns to its investors.
As of 11.35 am, Axis Bank stock price was trading at ₹1232.70, down 4.01%.
Disclaimer: This story is for educational purposes only. The views and recommendations expressed are those of individual analysts or broking firms, not Mint. We advise investors to consult with certified experts before making any investment decisions, as market conditions can change rapidly and circumstances may vary.
