Axis Bank’s share price surged 1.52% to Rs 970, a day after the Bank posted a 10% growth in net profit at Rs 5,863 crore for the second quarter of FY24 as compared to Rs 5,329 crore in Q2FY23. The total income of the Bank in the second quarter of FY24 surged to Rs 31,660 crore compared to Rs 24, 094 crore in q2FY23. Axis Bank’s stock price fell 1.97% in the last five days and 4.55% in the last one month, while it has gained 9.11% in the last six months and 5.82% in the last one year.
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Should you buy, sell or hold Axis Bank’s shares?
Jefferies: Buy – Target Price: Rs 1,250
“We tweak estimates and see 16% Cagr in profits (normalised) over FY23-26. The bank has also accreted capital of 54bps during 1H to 15% CET-1 CAR. We feel the bank can also anchor the 18% ROE quite well, that should allow for decent compounding. At 1.5x FY25 adj. PB and 9x adj. PE, valuations are attractive and around 25% discount to ICICI Bank. Axis is among our top picks in the sector with Target Price of Rs 1,250 (Rs 1,200 earlier) based on 1.9x Sep-25 adjusted PB. ‘Buy’ call stays.”
Motilal Oswal Financial Services: Buy – Target Price: Rs 1,150
“We remain watchful of deposit accretion for the bank as it will be critical to sustain healthy loan growth (targets 400-600bp higher growth vs. system over the medium term). Asset quality remains robust, with slippages declining further and recoveries remaining strong. We change our earnings estimates by -1.7%/2.1% for FY24/FY25 and expect FY25 RoA/RoE of 1.9%/16.6%. We retain our ‘Buy’ rating with a Target Price of Rs 1,150 (1.7x FY25E ABV).”
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JM Financials: Buy – Target Price: Rs 1,040
“In our view, Axis Bank continues to be in investment mode w.r.t to its distribution and liability franchise as well as digital initiatives. While initial signs of success are visible, we believe it will take some time for the bank in closing the gap with larger private sector peers. In our view, NIMs sustainability coupled with steady loan growth will lead to meaningful valuation upsides for Axis Bank. Given the long-term measures undertaken to improve the liability franchise and portfolio granularity, we expect ROA/ ROE of 1.7%/ 17.6% in FY25E. We maintain ‘Buy’ with a Target Price of Rs 1,040 valuing the core bank at 1.8x FY25E P/BV.”
InCred Equilties: Hold – Target Price: Rs 1,050
“We prefer to remain skeptical of Axis Bank’s growth, margin and asset quality trajectory in the near term. We have valued the standalone bank at 1.8x FY25F BV and added Rs 50/share for subsidiaries. Accordingly, we have arrived at a revised target price of Rs 1,050 (Rs 1,030 earlier) and maintained our ‘Hold’ rating on the stock. Better-than-expected growth/margins pose an upside risk while lower profits are a downside risk.”
(The recommendations in this story are by the respective research analysts and brokerage firms. FinancialExpress.com does not bear any responsibility for their investment advice. Capital markets investments are subject to rules and regulations. Please consult your investment advisor before investing.)
