Morgan Stanley has reiterated its overweight rating on Axis Bank with a target price of ₹1,325 per share, implying a potential upside of about 16.9% from the current market price of ₹1,133.00.
In its latest financials seminar takeaways, the bank highlighted improving traction in deposit growth, particularly as liquidity conditions have strengthened over the past two quarters. Management reiterated guidance of a gradual acceleration in loan growth to above system levels in FY26, with a medium-term aim of maintaining loan growth 2–3 percentage points higher than the industry average.
On margins, Axis Bank noted that net interest margin (NIM) is expected to continue moderating in Q2FY26 as the full impact of the repo rate cut flows through, though this would be partly offset by deposit repricing. Management said NIM is expected to recover to around 3.8% once deposits reprice with a lag.
The bank also clarified that the economic loss of technical slippages is negligible, with tighter NPL classification filters driving a one-time upfront impact. Over the next few quarters, sustained moderation in net technical slippages is expected.
Morgan Stanley said Axis Bank remains well placed to deliver steady loan growth and stable asset quality, supporting its positive view.
Disclaimer: The views and investment recommendations expressed are those of Morgan Stanley. These do not represent the views of this publication and should not be considered as investment advice. Investors are advised to consult their financial advisors before making any investment decisions.