So far this year, shares of Axis Bank have dropped 8.65%. The private lender lost Rs 5,728 crore in the three months that finished on March 31, 2023. This was a big change from the year before, when it made Rs 4,118 crore. The big loss was caused by a one-time loss of Rs 12,500 crore in Q4 FY23, which was caused by the purchase of the consumer and non-banking finance businesses of Citigroup Inc. Even though the lender lost money, business growth stayed strong. It had a running profit of Rs 9,168 crore, which does not include provisions or contingencies, compared to Rs 6,466 crore a year earlier.
Three brokerages said “Buy” about the stock. Over the next year, YES Securities has set a goal price of Rs 1,300, which means the price could go up by 51.16 percent.
“Gross slippages came to Rs 3,375 crore (an annualised slippage ratio of 1.80%), and recoveries and upgrades were good at Rs 2,699 crore. Net interest margin (NIM) was down to 4.22 percent, but it was up 1 basis point when compared to the same period last year, the firm said.
“The lender’s loans, total operating expenses, and fee income all went up. Management said that Axis Bank can grow by 400-600 basis points (bps) more than the rest of the banking system. Credit growth is expected to be between 12 and 13% for the industry as a whole. Earlier, the bank’s growth had slowed because it didn’t feel safe doing low-yield corporate and mortgage lending at the time, the brokerage said.
The new goal price for Prabhudas Lilladher is Rs 1,140, up from Rs 1,100.
“Axis Bank had a mixed quarter. Core PPoP (Pre-provision operating profit) of Rs 9,080 crore was 1.80% below our estimates due to lower NII (Net interest income), but core PAT (Profit after tax) beat estimates by 16% as provisions dropped sharply quarter-on-quarter (QoQ) due to improving asset quality,” PL said.
JM Financial Institutional Securities has set a goal price of Rs 1,075 on the counter for the next 12 months.
“From our point of view, the change is going in the right direction, as shown by the steady growth of loans, the improvement in the profile of liabilities, the strong quality of assets, which leads to low credit costs, and the steady improvement of the return profile. The re-rating of the stock will depend on how well the company meets its loan growth goals and maintains its net interest margins. The current core valuations of 1.5x FY25E BVPS (Book Value Per Share) are reasonable, and JM Financial predicted that when Axis Bank begins to produce solid operating performance on a more consistent basis, the gap between it and larger private sector peers will close.
On Friday, Axis Bank ended the day at Rs 860, which was 2.39 percent lower than where it started. At the end of trading on Friday, the price of the stock had dropped 11.38 percent from its 52-week high of Rs 970.45, which was reached on January 4, 2023. Still, Axis Bank’s stock has gone up 39.14% since it hit a one-year low of Rs 618.10 on June 23, 2017.
The Indian stock market was closed on Monday because it was Maharashtra Day. In the last session, the local benchmarks made their seventh straight session of gains. On Friday, the 30-share benchmark Sensex pack rose 463 points, or 0.76 percent, to finish at 61,112, while the broader NSE Nifty index rose 150 points, or 0.84 percent, to 18,065. Today, trading would start again on the local indices.