Axis Bank Shares Surge to Record High After UBS Upgrade

Shares of private sector lender Axis Bank reached a record high of ₹ 1,286 on November 20, 2025, following an upgrade by UBS Securities, which changed its rating from ‘Neutral’ to ‘Buy’. The brokerage also increased its 12-month price target from ₹ 1,300 to ₹ 1,500, indicating a potential upside of approximately 16.6%. This marks a significant rebound for Axis Bank, which has seen its stock rise nearly 38% from a 52-week low of ₹ 934 in January 2025.

In the past year, the bank’s share price has appreciated by 13%, while it gained 7% over the last six months, 19% in three months, and 5% in just one month. UBS noted that Axis Bank is showing positive trends in credit costs, asset quality, and loan growth, coinciding with a more favorable operating environment. The brokerage emphasized that the bank is in a more advantageous position compared to many of its peers, highlighting that the current stock valuation offers an attractive risk-reward scenario.

Key Factors Behind UBS’s Upgrade

UBS’s optimistic outlook on Axis Bank is supported by three primary factors. First, the bank has gradually overcome previous pressures stemming from a challenging macroeconomic environment, modest loan growth in the first half of fiscal year 2026, and higher slippages and credit costs compared to its competitors. Recent industry data suggests improvements in consumer credit and personal loan stress, particularly after recent policy changes.

Management forecasts that full-year credit costs for FY26 will be lower than those recorded in the first half, signaling a stronger second half. UBS projects credit costs of 110 basis points for FY26 and 80 basis points for FY27, aligning with strengthening fundamentals despite remaining above consensus expectations.

Additionally, UBS highlighted Axis Bank’s improved liability profile, noting that retail deposits now account for approximately 54% of its Liquidity Coverage Ratio (LCR) base. This represents a significant improvement of 260 basis points since Q4 FY23 and aligns closely with industry peers. The LCR remains stable at around 120%, within the sector’s range of 120% to 132%. With easing deposit pressures and improving liquidity, UBS anticipates loan growth of 14% to 15% over FY26 to FY28.

Although margins may remain subdued in the short term due to an expected 25 basis point rate cut in 2025, factors such as gradual deposit repricing and lower Cash Reserve Ratio (CRR) are expected to support a recovery in margins, potentially reaching around 3.8% by FY27. Despite a 11% increase in stock value over the past year, Axis Bank’s shares trade at 1.5 times FY27 estimated price-to-book value, significantly below its five-year average.

Technical Analysis and Market Sentiment

Analysts have differing views on the stock’s potential trajectory. Anand James, Chief Market Strategist at Geojit Investments, observed that the stock has demonstrated strong upward momentum following a significant rise since November 10. He indicated that the recent peak could stretch towards a record high of ₹ 1,339, contingent upon overcoming resistance levels between ₹ 1,286 and ₹ 1,303.

In contrast, Amruta Shinde, Research Analyst at Choice Broking, maintains a bullish stance, recommending a buy at ₹ 1,281 with a stop loss set at ₹ 1,235 and a target of ₹ 1,360. She noted that the stock is trading near the breakout zone, which aligns with the 20-day Exponential Moving Average (EMA), a point of renewed buying interest. Shinde highlighted that the stock remains above key moving averages, reinforcing its bullish configuration.

Immediate support is noted at ₹ 1,260, followed by stronger support at ₹ 1,235. A dip below these levels could signal deeper weakness. Shinde pointed out strong momentum indicators, with the Relative Strength Index (RSI) at 79.25, suggesting a robust upward bias in market sentiment.

Investors should consider these insights carefully, as the views and recommendations presented reflect the analyses of individual experts and should be verified with certified financial advisors before making any investment decisions.