New Delhi. There was a sharp fall in the shares of Axis Bank on 16 December. Shares of this big private sector bank fell by more than 5 percent and closed at Rs 1,219. Investors became cautious after the report of international brokerage Citi Research, in which bank management indicated a delay in recovery in Net Interest Margin (NIM). The effect of this decline was clearly visible on Bank Nifty also.
Investors cautious due to delay in NIM recovery
According to Citi Research, the management of Axis Bank now believes that the recovery of NIMs may not be seen in the current Q3FY26, but in Q4FY26 or Q1FY27. Earlier it was expected that margins would start improving in the October-December 2025 quarter. The brokerage said that the NIM trend could be ‘C’ shaped in the coming 15–18 months and the target has been kept around 3.8 percent. This statement shocked the expectations of the market.
Brokerage opinion: Neutral call remains intact
Citi Research has maintained its ‘Neutral’ rating on Axis Bank and kept the target price at Rs 1,285. This shows a very limited gain compared to the previous closing price of the share. The report said that there are signs of improvement in corporate lending and demand is also returning in the retail segment, although it will be necessary to keep an eye on its sustainability. Difficulties in card business are reducing and personal loans also seem to be stabilising.
What said on asset quality and slippage
According to the brokerage, there may be seasonal fluctuations in gross slippage in Q3 due to CC and OD accounts related to agriculture. However, this pressure will not be as severe as Q1. Also, there are no signs of any major stress in the export-based MSME segment. Nevertheless, the bank’s fee-to-asset ratio is currently increasing only within a limited range.
Impact on Bank Nifty, most banks slipped
Bank Nifty index fell 0.72 percent to close at 59,034.60 due to fall in heavyweight shares like Axis Bank. Shares of Bank of Baroda, Canara Bank, PNB and IDFC First Bank also fell by about 1 percent. Apart from this, SBI, HDFC Bank, IndusInd Bank, Federal Bank and AU Small Finance Bank also closed in the red, which showed pressure on the entire banking sector.
Bank Nifty stuck in range
According to technical analysts, Bank Nifty is currently in the consolidation phase. The level of 59,200–59,300 is considered an important support, while a durable breakout above 59,700–59,800 can bring back the momentum. The RSI remains below 60, which shows a lack of clear direction. Some brokerage houses are still positive on the index, but investors are being advised to remain cautious in the near term.
