Stock check: Axis Bank, down 7% YTD, to outperform Nifty 50 index in 2025? Here’s what technical data reveals

Axis Bank stock check: Shares of Axis Bank have been on a downtrend for the last few months, having shed over seven per cent year-to-date (YTD) and 15 per cent in the last six months. The private banking stock, however, is poised to outperform the domestic equity benchmark Nifty 50 in 2025, given its technical levels and the current breakout marks placed on the frontline index charts.

According to domestic brokerage JM Financial Institutional Securities Ltd, in the last seven months, Axis Bank’s stock has declined from a high of 1,340 levels as observed on July 12, 2024, to a low of 933 levels as observed on January 27, 2025. It has bounced up in the last two weeks to sustain above its eight-day EMA.

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Axis Bank share price: What does technical data reveal?

According to Neeraj Agarwal, Technical & Alternative Research, JM Financials, the recent uptrend in the Axis Bank stock has been fueled by higher-than-average traded and delivery volumes. The average traded volume since the uptrend stands at 9.7 million shares, compared to 8.7 million when the stock declined. The average delivery volumes for the period stands at 6.5 million and 5.9 million shares.

The series started with a cumulative future open interest of 111.3 million shares against the last three series, which averaged 69.1 million shares, as observed on the day of inception. It currently stands at 101.9 million shares, suggesting short covering. “We expect further short covering to prevail, with open interest still on the higher side,” said Agarwal.

The stock has a relatively stronger seasonality in the second quarter of 2025, with the bottom formation in the first quarter. Quarter-to-date, the stock has declined by five per cent compared to an average quarter-negative return of 0.3 per cent observed in the last 10 years. Shares of Axis Bank settled 1.14 per cent lower at ₹996.75 apiece on the BSE. The market capitalisation stands at ₹3,08,595.13 crore.

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Axis Bank stock: Should you buy, sell, or hold?

A negative return of over five per cent has been observed only three times (in 2018, 2020, and 2023), while a negative return of over 10 per cent has been observed only once (in 2020). Overall, the technical data suggests a limited downside from the current levels.

In the last 10 years, the stock has closed in the green in the second quarter on eight occasions with an average return of ~six per cent. Compared to NSE200 weights, mutual funds are underweight in the Axis Bank stock. After the COVID-19 pandemic decline, the ratio of Axis Bank over Nifty 50 has been trading in an upward-sloping channel pattern. 

It tested the lower end of the pattern at the start of the current month and has started moving up in favour of Axis Bank. With the upper end of the pattern at significantly higher levels, we expect strong outperformance to prevail. The ratio trades at 0.6 standard deviations below the mean of 0.0466 on a five-year data window.

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Axis Bank Q3 Results

Axis Bank reported a four per cent growth in its October-December quarter net profit to ₹6,304 crore, impacted by asset quality pressures from the retail segment. Executives at the country’s third largest private sector lender said the bank sees a degree of indebtedness in certain segments of the borrowers which led to slowing loan growth to nine per cent in the October-December period.

The bank, however, does not have any clarity on how long the ongoing challenges will last, an executive said, adding that the tepid GDP growth is among the factors in the macro environment having a bearing on repayments.

The core net interest income grew by nine per cent to ₹13,483 crore and the net interest margin declined by eight basis points on year to 3.93 per cent. Its gross slippages came at ₹5,432 crore, of which ₹4,923 crore came from the retail segments, including unsecured lending and agri loans.

Amitabh Chaudhry, managing director and chief executive of the lender, had said retail asset quality is among the three focus areas for the bank along with deposit quality and costs in the current cycle and exuded confidence that things will “stabilise” over the next few quarters.

Disclaimer: The views and recommendations provided in this analysis are those of individual analysts or broking companies, not Mint. We strongly advise investors to consult with certified experts, consider individual risk tolerance, and conduct thorough research before making investment decisions, as market conditions can change rapidly, and individual circumstances may vary.