Axis Bank share price hits record high as UBS upgrades lender. Do technicals support bullish outlook?

Axis Bank at record high: Shares of private sector lender Axis Bank hit their record high of ₹1,286 on Thursday, November 20, after brokerage UBS Securities upgraded the lender's rating from ‘Neutral’ to ‘Buy’. It also revised its 12-month price target to ₹1,500 from ₹1,300, reflecting a favourable medium-term outlook and an upside potential of 16.6%.

The private bank stock has risen almost 38% from its 52-week low of ₹934, hit in January 2025. In the last one year, the private sector lender has added 13% to its value. Meanwhile, it has advanced 7% in the past six months, 19% in 3 months and 5% in a month.

UBS said Axis Bank is showing improving trends across credit costs, asset quality, and loan growth as the operating environment turns more supportive. The global brokerage also finds Axis Bank better positioned than many of its peers, noting that the stock’s valuation discount offers an attractive risk-reward setup.

According to UBS, Axis Bank appears to have moved past the most difficult part of its operating cycle and is now entering a stronger phase.

“We believe Axis Bank is better placed than state-owned enterprises (SOEs) and mid-sized banks. We upgrade Axis Bank from ‘Neutral’ to ‘Buy’,” wrote the brokerage.

3 Factors Driving UBS’s Positive View on Axis Bank

UBS has turned positive on Axis Bank on the back of these three main triggers:

1. Asset-quality concerns are easing

UBS noted that Axis Bank had been under pressure due to a weak macro backdrop, modest loan growth in the first half of FY26, and higher slippages and credit costs compared to peers. These concerns are now gradually fading.

Industry data shows stable to improving trends in consumer credit and personal-loan stress after recent policy changes, while SME overdue data for large private banks remains steady.

Importantly, management expects full-year FY26 credit costs to be lower than first-half levels, signalling a stronger second-half performance. UBS has pencilled in credit costs of 110 bps for FY26 and 80 bps for FY27 — still above consensus but aligned with improving fundamentals.

2. Loan growth set to accelerate as liability pressures ease

UBS highlighted Axis Bank’s strengthening liability profile as a key support. Retail deposits now form about 54% of its Liquidity Coverage Ratio (LCR) base — a 260-bp improvement since Q4FY23 and broadly in line with peers. The bank’s LCR stays stable around 120%, within the sector’s 120–132% band.

With deposit pressures easing and liquidity improving, UBS expects loan growth of 14–15% over FY26–28. Margins may remain soft in the near term due to an anticipated 25-bp rate cut in 2025, but gradual deposit repricing and lower CRR should help margins recover to around 3.8% by FY27.

3. Attractive valuation leaves scope for re-rating

Axis Bank’s stock has risen 11% in the past year but still trades at 1.5x FY27E price-to-book — two standard deviations below its five-year average. The bank also trades at a 26% discount to ICICI Bank and at 23% and 8% discounts to HDFC Bank and Kotak Mahindra Bank, respectively.

UBS expects ROA and ROE to improve to 1.7% and 15% over FY26–28 as operating metrics strengthen.

Reflecting this, the brokerage has raised its FY26–28 earnings estimates by 1–4%. Its revised sum-of-the-parts valuation assigns 1.8x FY27E price-to-book to the core bank and ₹90 per share to subsidiaries, leading to an upgraded target price of ₹1500.

UBS, however, cautioned that lower-than-expected loan growth remains a key downside risk.

Axis Bank: Technical View

Anand James, Chief Market Strategist at Geojit Investments, said the stock has shown strong upward momentum after its swing higher from November 10.

According to him, “The swing higher from November 10 has taken the stock to a new 52-week high, testing last September’s peak, since when a multi-month downtrend had unfolded. This encourages us to look at the potential for stretching to the record peak of 1339.”

However, he noted that despite a positive signal-line crossover in the MACD, several other oscillators indicate exhaustion. He added that “we need to see past the exhaustion band of 1286-1303, until which a limited upside view may be played for.”

Amruta Shinde, Research Analyst at Choice Broking, maintained a bullish stance and recommended buying Axis Bank at ₹1281 with a stop loss at ₹1235 and a target of ₹1360.

She explained that Axis Bank stock is trading close to ₹1281 after giving a wide-range falling trendline breakout, followed by a clean retest of the breakout zone. This retest aligns with the 20-day EMA, reinforcing support and renewed buying interest.

She said the stock continues to trade above its key 20-, 50-, and 200-day EMAs, confirming a strong bullish structure. A sustained move above ₹1285 could push the stock towards ₹1360, she noted.

On the downside, she flagged immediate support at ₹1260, followed by stronger support at ₹1235, which is near the 20-day EMA; a break below this region could trigger deeper weakness. Shinde highlighted strong momentum indicators, stating that the RSI at 79.25 signals robust upward bias. management.

Disclaimer: The views and recommendations made above are those of individual analysts or broking companies, and not of Mint. We advise investors to check with certified experts before making any investment decisions.