Axis Bank Q4 Results Review: Motilal Oswal Maintains 'Neutral' Stance, Hikes Target Price Post Inline Earnings

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Motilal Oswal Report

Axis Bank Ltd. reported in-line earnings, with margins expanding 4bp QoQ. Asset quality improved slightly as slippages were under control, while the gross/net non-performing asset ratio improved sequentially.

Deposits grew 7% QoQ, while advances grew 3% QoQ, leading to an improvement in the C/D ratio to 88.7%. Average liquidity coverage ratio stood at 118%. Some stabilization was seen in the credit card portfolio; however, the bank is becoming more stringent in classifying loans, which could affect slippages going forward.

Additionally, given the rate cut, margins are expected to remain under check. We fine-tune our earnings and estimate FY27E RoA/RoE of 1.7%/15.0%. Reiterate Neutral with a target price of Rs 1,300 (1.6x FY27E adjusted book value).

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