What should investors do with Axis Bank? Brokerages see over 50% upside post Q3 results

It had posted a profit of Rs 1,116.6 crore in the corresponding quarter last year.

The bank's net interest income (NIM) was up 17 per cent on a YoY basis to Rs 8,653 crore compared to Rs 7,373 crore posted last year. Source: Reuters

Axis Bank gains over a per cent in a weak market on Tuesday, a day after the private sector lender reported a 3.2x year-on-year (YoY) rise in the profits at Rs 3,614 crore for the quarter ended December 31, 2021. It had posted a profit of Rs 1,116.6 crore in the corresponding quarter last year.

The bank's net interest income (NIM) was up 17 per cent on a YoY basis to Rs 8,653 crore compared to Rs 7,373 crore posted last year. The lender’s total provisions and contingencies stood at Rs 1,335 crore, down 64.46% y-o-y, from Rs 3757 crore posted last year.

The bank’s gross non-performing assets (NPAs) ratio – bad loans as a percentage of gross advances -- were at 3.17 per cent in Q3FY22 compared to 3.53 per cent posted in Q2FY22.

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The net NPA ratio was at 0.91 per cent in the period under consideration compared to the 1.08 per cent posted in September 2021 quarter.

The bank’s gross slippages in Q3FY22 stood at Rs 4,147 crore as compared to Rs 5,464 crore during Q2FY22. Axis Bank’s advances grew 17 per cent YoY and 7 per cent QoQ as of December 31, 2021. Retail loans grew 18 per cent YoY and 6 per cent QoQ.

We have collated a list of recommendations from various global brokerage firms according to a Zee Business TV report:

CLSA: Buy| Target Rs 1080

CLSA maintained its buy rating on Axis Bank post-December quarter results with a target price of Rs 1080 that translates into an upside of over 50 per cent from Rs 705 recorded on 24 January.

The results were strong across board with 6.9 per cent QoQ loan growth, 17 per cent YoY NII growth & fully normalised asset quality.

Core PPOP (+8.4% YoY) was largely inline due to a further spike in Opex (+25% YoY). At 1.45x/1.25x FY23/23CL Price-to-Book value is undemanding.

Axis Bank: Buy| Target Rs 1000

Citigroup maintained its buy rating on Axis Bank post Q3 results with a target price of Rs 1000 that translates into an upside of over 41 pert cent from Rs 705 recorded on 24 January.

The private sector lender delivered on much-awaited improvement on growth & NIM in this quarter. 1.7x Mar'23 P/B, offers value discount to peers.

The global investment bank lower FY22/23 est. by 6%/5% on higher opex/lower treasury income. The bank guided towards 16-16.5% in the medium term.

Morgan Stanley: Overweight| Target raised to 1050

Morgan Stanley maintained an overweight rating on Axis Bank post December quarter results and raised the target to Rs 1050 from Rs 1000 earlier.

Goldman Sachs: Buy| Target Rs 927

Goldman Sachs maintained a buy rating on Axis Bank post December quarter results but raised its target price to Rs 927 from Rs 920 earlier.

Credit Suisse: Outperform| Target Rs 960

Credit Suisse maintained an outperform rating on Axis Bank post December quarter results with a target price of Rs 960.

Jefferies: Buy| Target raised to Rs 1040

Jefferies maintained its buy rating on Axis Bank post December quarter results but raised its 12-month target price to Rs 1040 from Rs 1020 earlier.

(Disclaimer: The views/suggestions/advices expressed here in this article is solely by investment experts. Zee Business suggests its readers to consult with their investment advisers before making any financial decision.)

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