Stock Of The Day: Axis Bank Can't Catch A Break In Gloomy 2025

Shares of Axis Bank Ltd. extended their losses in 2025 to over 12% on Monday even as analysts maintained their outlook post the muted third quarter performance.

The stock began the year on a negative note after ending the previous year with a decline of 3.4%. From 2021 to 2023, shares of the private lender had zoomed nearly 76% compared to 55% gains in Nifty 50.

The stock has ended positive only in seven sessions so far this year, while hitting consecutive 52-week lows last week. The counter is trading below its long-term trend gauge — 200-daily moving average — and below the 14-day simple moving average and the 21-day exponential moving average.

Immediate support for the stock will be at the Rs 925 level, near two standard deviations below the 14-day moving average. A breakout of that range could send the stock further down.

On the upside, the stock needs to close above the psychologically crucial Rs 1,000-mark to show signs of revival. This level is also where the 14-day SMA lies.

The stock fell as much as 1.58% to Rs 937.6, compared to a 1.3% decline in the NSE Nifty 50. Relative strength index was at 28.9, implying the stock is oversold.

Forty of the 49 analysts tracking the company have a 'buy' rating, and nine suggest a 'hold', according to Bloomberg data. The average of the 12-month analysts' price target implies a potential upside of 37%.

Rise in provisions and slightly higher bad loans caused the private lender to report muted results for the quarter ended in December.

However, the higher net interest income helped the bank's net profit to rise 4% year-on-year in the third quarter of the current financial year to Rs 6,304 crore, which is in line with the consensus estimate.

Axis Bank's asset quality slipped marginally, with the gross non-performing assets ratio rising to 1.46% as of Dec. 31, 2024, compared to 1.44% in the previous quarter. The net NPA ratio also rose slightly to 0.35% from 0.34% in the prior quarter.

Macquarie maintained an 'outperform' rating with a target price of Rs 1,440 per share. "Clouds of uncertainty loom," the brokerage said, adding that profit miss was driven by higher credit costs. Unsecured and agri delinquencies contributed to higher provisions, it said.

Citi Research also maintained 'neutral', but cut its target to Rs 1,160 from Rs 1,190 per share earlier. Slippages and credit cost remain elevated with slowing growth, it said.