Axis Bank Q2 Results Preview: Bank Sees Lower Margins, Lower NII; Stable Net Profit At Rs 6,000 Cr

The Q2FY26 result preview from Axis Bank shows consistent performance with modest improvement in key metrics. On Wednesday, October 15, the bank will release its financial results for the quarter that ended in September 2025.

Axis Bank Q2 Results Preview By Prabhudas Lilladher

Net Interest Income (NII) for the bank is expected at Rs 13,634.7 crore, up 0.6% QoQ and 1.1% YoY, according to brokerage company Prabhudas Lilladher. Mostly due to margin compression, Pre-Provision Operating Profit (PPOP) is expected to be Rs 10,579.3 crore, down 1.2% YoY and 8.1% QoQ. In order to maintain profitability, provisions are predicted to drop precipitously to Rs 2,000 crore, representing a 9% YoY and a 49.3% QoQ fall.

As per Prabhudas Lilladher, estimated profit after tax (PAT) is Rs 6,434.5 crore, down 7% YoY but rising 10.8% QoQ owing to lower provisioning costs. It is anticipated that total loans would reach Rs 11 lakh crore, representing a solid credit growth of 3.8% QoQ and 10% YoY.

The bank's Gross Non-Performing Asset (NPA) may slightly increase to 1.56% from 1.44% a year ago, while its Net Interest Margin (NIM) is anticipated to decline by 9 basis points (bps) QoQ to 3.62%.

Credit cost is anticipated to fall by 76 basis points on a quarterly basis to 0.73%. Despite margin constraints, Axis Bank's Q2FY26 performance is anticipated to demonstrate robust loan growth, bolstered by a significant drop in provisioning, Prabhudas Lilladher stated.

Axis Bank Q2 Results Preview By InCred Equities - InCred Group

In Q2FY26, the bank's financial performance reflected mixed trends across key metrics. The bank's financial performance in Q2FY26 showed a range of changes in important indicators. With a net interest income (NII) of Rs 13,200 crore, interest income was somewhat under pressure, declining 2.3% year on year (YoY) and 2.8% quarter on quarter (QoQ).

Due to lower margins and higher operating expenses, Pre-Provision operating Profit (PPOP) may drop by 7.1% YoY and 13.6% QoQ to Rs 9,900 crore. Profit After Tax (PAT) may see a jump to Rs 6,000 crore, indicating a 3.1% QoQ gain but a 13.5% YoY decline, indicating some sequential improvement.

As a result of ongoing pressure on yields, the Net Interest Margin (NIM) dropped to 3.65%, down 34 basis points (bps) YoY and 15 bps QoQ. Better asset quality management was demonstrated by the notable improvement in credit costs to 73 bps, an improvement of 78 bps QoQ and a decline of 16 bps YoY.

With advances of Rs 10,80,000 crore, up 1.9% QoQ and 8% YoY, the loan book continued to grow steadily. Overall, Q2FY26 showed strong credit expansion and better asset quality, but declining margins and lower operating income continued to have an effect on profitability.

Axis Bank Target Price

ADD, TP Rs1430, Rs1180 close

"Axis Bank trades at a steep discount to ICICI Bank's core price-to-book valuation. We expect the discount to materially narrow over the medium term as systemic growth recovers and credit cost normalization aids profitability," said InCred Equities in a note.

"Ahead of Q2 results, expectations remain high for stable NIMs and steady loan growth. Technically, the stock holds above its 20-day EMA with RSI near 58 and MACD in buy mode. Support at ₹1150; resistance at ₹1200-₹1215. Outlook: Positive bias; strong results could drive breakout above ₹1215," said technical analyst Riyank Arora of Mehta Equities Ltd.

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