1QFY27: Mix shift weighs on margin: EPS cut by ~3% over FY27-28F; valuations inexpensive, reiterate Buy

研报英文原文证据摘录

1QFY27: Mix shift weighs on margin: EPS cut by ~3% over FY27-28F; valuations inexpensive, reiterate Buy

Global Markets Research

Axis Bank AXBK.NS AXSB IN 20 July 2026

EQUITY: BANKS

Rating Remains Buy1QFY27: Mix shift weighs on margin

Target price

EPS cut by ~3% over FY27-28F; valuations inexpensive, reiterate Buy Reduced from INR INR 1,545 1,560

Axis Bank reported PAT of INR71bn (+23% y-y, +1% q-q), 4% above our estimate on lower opex Closing price INR 1,329 17 July 2026and better treasury income. NIM (calc) delivery was soft, declining 10bp q-q on a shift in balance

sheet mix. Since 3QFY26, AXSB's NIM decline of 25bp has been the sharpest among peers (6-

Implied upside17bp) (Fig.11). The corporate loan mix has also risen sharply, up 462bp y-y to 34.4%, against +16.3%

peers where the change has ranged from +11bp to +75bp and the proportion remains lower at 23-

Market Cap (USD mn) 42,928.3

27% (Fig.10). Management believes NIMs have bottomed and should improve from here on, ADT (USD mn) 102.3

though we expect the recovery to be nominal through FY27F as the loan-mix impact takes longer to

unwind. On FCNR, the bank expects to clock a share above its organic share (Fig.5) (current Relative performance chart

deposit share at 5.3%). We raise our FY27F loan/deposit growth estimates to 17%/16% (from

15%/14%) but cut FY27-28F EPS by 3%, largely on lower NIMs and a tad higher credit costs. We

expect AXSB to deliver RoA/RoE of 1.5-1.6%/~14% over FY27-28F, with valuation inexpensive at

1.4x FY28F BVPS. We maintain Buy with a lower TP of INR1,545 (vs INR1,560 previously).

Margin down 10bp q-q; controlled opex led to 2% beat on core-PPOP

Core PPOP of INR111bn (+5% q-q) was 2% above our estimates as sharp margin decline (-10bp