Analysts retain bullish view on Axis Bank after robust Q3 show

Mumbai: Analysts maintained their bullish stance on Axis Bank and raised their price targets on the stock after December quarter earnings at India’s third-largest private sector lender surpassed analyst expectations.

Net profit rose 62% year-on-year (YoY) aided by higher net interest income and marginal improvement in asset quality.

Morgan Stanley raised its price target as it found the current valuations – at 1.8 times one-year forward price-to-book (P/BV) – attractive.

Analysts at JM Financial also raised their price target and found Axis Bank’s core valuations at 1.8 times and 1.5 times FY24 and FY25, respectively, inexpensive.

“Transformation is in the right direction…We expect the discount to larger private sector peers to narrow as starts reporting strong operating performance on a more sustainable basis,” said in a client note.

At brokerage Nuvama, Axis Bank is its preferred pick in the banking space. On an aggregate, analysts raised their consensus price target by 3.81% to ₹1,114.83 apiece. This translates into a near 23% jump from the current levels.

Despite the strong Q3 show and bullish commentary from brokerages, shares of Axis Bank fell nearly 3% to their lowest in one month. The stock closed at ₹910.30, down 2.4% from the previous close.
Jefferies also raised its price target after factoring in a 7-13% increase in earnings estimates.
Meanwhile, CLSA maintained its price targets but raised its FY25 earnings estimates by 1-3% on the grounds that the bank’s benign credit cycle, operational expenses, and retail deposit mobilisation remained key deliverables going forward.