Monday, February 26, 2024

Axis Bank fell by 6% after the results, sell shares or buy on decline? Check rating and target price

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Axis Bank Stock Price: After the quarterly results, there is a decline in the shares of private lender Axis Bank. The bank’s shares fell by about 6 percent intraday today to Rs 1021, which had closed at Rs 1089 on Tuesday. The bank had released its quarterly results on Tuesday and its margins are under pressure. Due to which the sentiment of investors has deteriorated somewhat. After the results, brokerage houses also started selling bank stocks (Banking Stock) Are giving mixed opinions regarding this. Although most brokerages are positive on this.

Brokerage ratings and targets on the stock

morgan stanley

Rating: Overweight
Target price: Rs 1450

Bernstein

Rating: Outperform
Target price: Rs 1250

MOSL

Rating: Neutral
Target price: Rs 1175

HSBC

Rating: Buy
Target price: Rs 1404

Jefferies

Rating: Buy
Target price: Rs 1380

Citi

Rating: Buy
Target price: Rs 1370

JP Morgan

Rating: Overweight
Target price: Rs 1225

Yes Securities

Rating: Buy
Target price: Rs 1425

Motilal Oswal

Rating: Neutral
Target price: Rs 1175

Religare Broking

Rating: Buy
Target price: Rs 1275

Brokerage House Motilal Oswal

Brokerage house Motilal Oswal says that the profit of Axis Bank was Rs. 6070 crore in the December quarter, which is 4 percent more on annual basis and 3.5 percent more on quarterly basis. The bank’s profit has increased due to strong other income. Net interest margin moderated 10bp on quarterly basis to 4.01 percent. Management has suggested that funding costs will continue to increase in the next two quarters. Loan growth was better at 22% YoY and 3.9% QoQ. While deposit growth also remained strong at 5% QoQ. The C/D ratio moderated 110 basis points quarterly to 92.8%. In view of the increase in costs and margin pressure, the brokerage has cut its FY25E EPS estimate by 8 percent. Additionally, with a higher CD ratio of 93%, we estimate Axis Bank to achieve 15.7% CAGR in loans over FY24-26E, which is slower than peers. It is estimated that FY25 RoA/RoE will be 1.7%/17.4%.

Brokerage House Yes Securities

According to brokerage house Yes Securities, the average gross slippage ratio of Axis Bank in the last 7 quarters has been 1.81 percent, while the average of ICICI Bank has been 2.01 percent. Whereas the margin has decreased slightly on quarterly basis. Axis Bank can pull multiple levers to increase structural margins. So far, Axis Bank has been growing much more than the growth of the banking system, but seems a bit cautious on this front.

Brokerage House Religare Broking

According to brokerage house Religare Broking, there has been healthy credit growth and increase in deposit amount along with increase in market share in terms of advances and deposits. In the mid-term, the bank expects 500-600bps more growth than the industry. Margins, which were under pressure during the quarter, are expected to improve going forward. Asset quality for the bank continues to improve, as slippages and corporate recoveries have declined as well as credit costs have improved. It is expected that NII, PPOP and PAT will grow at around 19%, 22% and 21% CAGR in FY23-26E.

How were the bank results?

In the December quarter, Axis Bank’s profit increased by 3.7 percent on annual basis to Rs 6071 crore. The bank had made a profit of Rs 5853 crore in the same quarter a year ago. The interest income of the bank increased from Rs 22,226 crore to Rs 27,961 crore on an annual basis. The gross-NPA ratio improved to 1.58 percent, which was 2.38 percent in the same quarter a year ago. Net NPA also decreased from 0.47 percent to 0.36 percent on annual basis. On annual basis, PPOP declined by 1.5 percent to Rs 9141 crore.

(Disclaimer: The advice to invest in stocks has been given by the brokerage house. These are not the personal views of digitnews. There are risks in the market, so take expert opinion before investing.)

 

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