Axis Bank Q3 Results Review — Yes Securities Retains 'Buy' On The Stock, Revises Target Price; Sees 35% Upside

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Yes Securities Report

We reiterate Buy rating on Axis Bank Ltd. with a revised price target of Rs 1400.

Asset Quality – Gross slippages rose on sequential basis due to seasonality and stress on unsecured retail:

Gross NPA additions amounted to Rs 54.32 billion for Q3 FY25, translating to an annualized slippage ratio of 2.1% for the quarter. Gross non-performing asset additions had amounted to Rs 44.43 billion during Q2 FY25. A dominant part of the slippages for Q3 emerged from the personal loans and credit cards book.

Most of the sequential rise in gross slippages amounting to Rs 9.89 billion comes from seasonality pertaining to agri loan slippages. Reported net credit cost amounted to 80 bps for the quarter.

The bank provides 100% on retail unsecured NPLs or linked loans on day 1 itself or 91 days past due, which is a tighter provisioning policy than several peers. Consequently, the credit cost for the bank would be higher than other banks in the initial quarters in the current cycle.

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