Understanding the Current Rating
The 'Hold' rating assigned to Axis Bank Ltd. indicates a neutral stance for investors, suggesting that the stock is expected to perform in line with the broader market or sector averages in the near term. This rating reflects a balanced view of the bank’s strengths and challenges, advising investors to maintain their current holdings without aggressive buying or selling.
Rating Update and Context
On 15 Oct 2025, MarketsMOJO revised Axis Bank’s rating from 'Sell' to 'Hold', accompanied by a significant improvement in the Mojo Score from 41 to 58 points. This change signalled a shift in the bank’s outlook, recognising improvements in certain operational and market factors. However, it is important to note that all financial data and performance indicators referenced here are as of 09 January 2026, ensuring investors have the most recent and relevant information.
Quality Assessment
As of 09 January 2026, Axis Bank demonstrates a good quality grade, underpinned by strong lending practices and asset quality. The bank maintains a low Gross Non-Performing Asset (NPA) ratio of 1.46%, which is a key indicator of prudent risk management and credit discipline. This low level of bad loans supports the bank’s ability to generate stable earnings and maintain investor confidence.
Moreover, the bank’s long-term fundamental strength is evident in its impressive compound annual growth rate (CAGR) of 50.36% in net profits over recent years. This robust growth trajectory highlights Axis Bank’s capacity to expand its core business and improve profitability over time.
Valuation Considerations
Despite the positive quality indicators, the valuation grade for Axis Bank is currently expensive. The stock trades at a price-to-book value of 2.1, which is above the average historical valuations of its peer group. This premium valuation suggests that the market has priced in expectations of continued growth and operational improvements.
Investors should be aware that while the stock has delivered a strong 1-year return of 20.72% as of 09 January 2026, this performance comes amid some profit pressures. Notably, the bank’s profits have declined by approximately 7% over the same period, indicating some challenges in translating revenue growth into bottom-line expansion.
Financial Trend Analysis
The financial trend for Axis Bank is currently assessed as negative, reflecting recent quarterly results that showed a decline in key profitability metrics. For the quarter ending September 2025, the bank reported a profit after tax (PAT) of ₹5,089.64 crore, down by 26.4% compared to the previous period. Additionally, the profit before depreciation, interest, and taxes (PBDIT) was at a low of ₹3,787.95 crore, with the operating profit to net sales ratio falling to 12.23%, the lowest in recent quarters.
These figures suggest short-term headwinds impacting earnings, possibly due to increased provisions, higher operating costs, or other sector-specific challenges. Investors should monitor upcoming quarterly results closely to assess whether these trends persist or improve.
Technical Outlook
From a technical perspective, Axis Bank’s stock exhibits a bullish trend as of 09 January 2026. The stock price has shown resilience and upward momentum, with a 3-month return of 9.77% and a 6-month return of 10.06%. The year-to-date (YTD) gain of 1.01% further supports the positive technical sentiment.
Institutional investors hold a significant 84.77% stake in the company, indicating strong confidence from well-informed market participants. This high level of institutional ownership often correlates with greater stock stability and can be a positive signal for long-term investors.
Market Performance Relative to Benchmarks
Axis Bank’s stock has outperformed the broader market over the past year, generating a return of 20.72% compared to the BSE500 index’s 7.09% return. This market-beating performance underscores the bank’s ability to deliver shareholder value despite recent profit pressures and valuation concerns.
Investment Implications
For investors, the 'Hold' rating suggests maintaining existing positions in Axis Bank while monitoring developments closely. The bank’s strong asset quality and long-term profit growth potential are encouraging, but the current expensive valuation and recent negative financial trends warrant caution. Investors should weigh these factors carefully and consider their risk tolerance and investment horizon before making decisions.
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Summary
In summary, Axis Bank Ltd. holds a 'Hold' rating as of 09 January 2026, reflecting a balanced view of its current fundamentals and market position. The bank’s strong lending quality and long-term profit growth are offset by an expensive valuation and recent quarterly profit declines. Technical indicators remain positive, supported by robust institutional ownership and market outperformance over the past year.
Investors should consider these factors in the context of their portfolio strategy, recognising that the 'Hold' rating advises neither aggressive accumulation nor divestment but rather a measured approach to this large-cap private sector bank.
About MarketsMOJO Ratings
MarketsMOJO’s rating system integrates multiple parameters including quality, valuation, financial trends, and technical analysis to provide a comprehensive view of a stock’s investment potential. The 'Hold' grade indicates a moderate outlook, suggesting that the stock is fairly valued relative to its prospects and current market conditions.
Key Metrics at a Glance (As of 09 January 2026)
- Mojo Score: 58.0 (Hold)
- Gross NPA Ratio: 1.46%
- Net Profit CAGR: 50.36%
- Price to Book Value: 2.1 (Expensive)
- Return on Assets (ROA): 1.5%
- 1-Year Stock Return: +20.72%
- Institutional Holdings: 84.77%
- Quarterly PAT (Sep 2025): ₹5,089.64 crore (-26.4%)
- Quarterly PBDIT (Sep 2025): ₹3,787.95 crore (lowest recent)
These figures provide a snapshot of Axis Bank’s current financial health and market standing, helping investors make informed decisions based on the latest available data.
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