In comparison to a deficit of Rs 5,728 crore during the same time last year, Axis Bank posted a net profit of Rs 7,129 crore. Net interest income increased to Rs 13,089 crore, an 11% increase.
Axis Bank led the Nifty gainers this morning, rising more than 4 percent, on April 25. The day before, the private sector lender had posted solid fiscal fourth quarter profits, which encouraged brokerages to maintain their bullish outlook.
The stock was up 4.23 percent from the previous close as of 10.47 am on the National Stock Exchange, trading at Rs 1,108.20.
The third-biggest bank in India turned a profit again and saw strong deposit growth along with a rebound in profits.
For the stock, Jefferies issued a “buy” rating with a target price of Rs 1,380 per share. According to the brokerage, the Q4 profit exceeded expectations by 13 percent, resulting in a good surprise.
According to Jefferies analysts, the company is selling at reasonable levels of 10x PE or 1.7 times (x) FY25 adjusted price-to-book (PB).
Axis Bank recorded a net profit of Rs 7,129 crore as opposed to a loss of Rs 5,728 crore during the same period last year.. Also rising by 11% to Rs 13,089 crore was net interest income (NII).
Additionally upbeat, Morgan Stanley analysts have set a target price of Rs 1,450 and have issued a “overweight” call on the shares. Because profit-before-tax (PBT) increased, interest income exceeded projections, the report stated.
The improvement of margins from the previous quarter as the cost of funds stabilized was a major plus for the Q4 scorecard.
Analysts at Antique noted that the bank’s net interest margin increased more than anticipated, reaching 4.1 percent, up 5 basis points on a quarterly basis compared to an expected fall of 7 bps.
Given the pace of increase in cost of funds have come off and if policy rate remains unchanged, then NIMs could stabilise in this narrow range going ahead,” the brokerage said. It kept its counter-buy call with a target price of Rs 1,275.
One tenth of a percentage point is equal to one basis point.
Accelerating deposits is an important re-rating trigger.
According to Morgan Stanley, deposit acceleration will also play a significant role in Axis Bank’s re-rating catalyst.
Deposits at Axis Bank increased more strongly than credit, rising 6% QoQ and 13% YoY, driven mostly by increased CASA growth.
Due to slower corporate growth and a downturn in the SME loan book, credit growth increased by 14% YoY and 3.5 percent QoQ.
The quality of the lender’s assets was also good. Gross non-performing asset (GNPA) ratio decreased by 15 basis points on a quarterly basis to 1.4 percent, while net non-performing asset (NNPA) decreased by 5 basis points to 0.3 percent as a result of gross slippages moderating to 1.6 percent of loans.
Compared to the benchmark Nifty 50’s 3% increase thus far this year, the Axis Bank shares has dropped by more than 3%.
Emkay analysts claimed that Axis Bank is less expensive than its competitors. “Valuations are still low, at 1.5x FY26E ABV, compared to over 2x for some large peers.” “We anticipate the bank to record a robust return on assets (RoA) of approximately 1.8 percent during FY25-27E and maintain our ‘buy’ rating, with a target price of Rs 1,400 per share,” the statement stated.
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