Maintaining their momentum sturdy, shares of Axis Financial institution, the nation’s fourth-largest non-public sector financial institution, gained one other 3.2% in Thursday’s commerce, October 23, to hit a contemporary one-year peak of ₹1,276, extending their bull run to the fifth buying and selling session as follow-through shopping for continued after the discharge of the financial institution’s September quarter numbers.
The current rally within the non-public sector lender has additionally pushed the shares nearer to their report excessive of ₹1,339.65, and they’re now simply 5% away from reaching that stage.
Final week, the financial institution launched its second quarter numbers. Although the web revenue got here in sharply decrease than analysts’ consensus estimates as a consequence of elevated provisioning, it reported enhancements in asset high quality, better-than-expected web curiosity margins, and a pickup in mortgage and deposit progress.
Analysts anticipate the inventory value to rise as excessive as ₹1,450
Brokerages maintained a broadly bullish stance on Axis Financial institution following its September quarter numbers, viewing the one-time provisioning hit as short-term and highlighting the lender’s regular operational efficiency, sturdy mortgage progress, bettering asset high quality, and steadiness sheet progress.
Home brokerage agency Prabhudas Lilladher maintained its ‘purchase’ score on the inventory and raised the goal value to ₹1,425 from ₹1,375. Likewise, ICICI Securities additionally retained its ‘purchase’ score on the inventory, revised the goal value to ₹1,450, and elevated its mortgage progress estimate to 12% YoY for FY26E.
Bernstein has an ‘outperform’ score on Axis Financial institution inventory with a goal value of ₹1,250 per share. HSBC, retaining its ‘purchase’ score, lifted its goal value to ₹1,460 from ₹1,340, citing sturdy mortgage progress, secure margins, and strong asset high quality.
Nomura issued a ‘purchase’ name on Axis Financial institution with a goal value of ₹1,440 per share, describing the financial institution’s second quarter efficiency as sturdy on core operations.
Jefferies additionally has a ‘purchase’ score and raised the goal value to ₹1,430 per share. It stated Axis Financial institution’s revenue got here in forward of estimates, supported by secure NIMs and wholesome mortgage and deposit progress of 12% and 11%, respectively.
Key quarterly metrics
The lender reported a 26% YoY drop in its web revenue at ₹5,090 crore. Sequentially too, web revenue declined 12.3% from ₹5,806 crore reported within the June quarter.
The financial institution’s revenue throughout the quarter was impacted by an extra one-time normal asset provision of ₹1,231 crore for 2 discontinued crop mortgage variants, following an RBI advisory after its FY25 annual inspection.
The financial institution’s web curiosity earnings (NII), the distinction between curiosity earned from lending actions and curiosity paid to depositors, stood at ₹13,745 crore, marking a 2% year-on-year rise. This was larger than analysts’ expectation of a 3% YoY decline, whereas the financial institution’s web curiosity margin (NIM) additionally exceeded estimates. coming in at 3.73%.
Its asset high quality improved with gross NPAs at 1.46 per cent and web NPAs at 0.44 per cent.
Disclaimer: This story is for instructional functions solely. The views and suggestions made above are these of particular person analysts or broking firms, and never of Mint. We advise buyers to verify with licensed specialists earlier than making any funding choices.
