While the three brokerages have retained positive recommendations, the outlook for Axis Bank will depend on whether it can translate strong balance-sheet growth into sustained improvements in profitability. The private lender reported a 37.6% YoY increase in net profit to Rs 7,003 crore, supported by lower provisions. Net interest income rose 11.8% to Rs 15,371 crore, while advances grew 23% and deposits increased 20.7% YoY.
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ICICI Securities, IDBI Capital, Systematix Report
Axis Bank Ltd. has received Buy recommendations from ICICI Securities, IDBI Capital and Systematix following its September-quarter earnings, with brokerages pointing to strong loan growth, improving asset quality and the possibility of a recovery in net interest margins.
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ICICI Securities maintained its Buy rating and target price of Rs 1,620, indicating 26% upside, while IDBI Capital retained Buy with a target price of Rs 1,600, implying 24% upside.
Systematix also maintained its Buy rating but raised its target price to Rs 1,500 from Rs 1,490, suggesting around 16% upside.
The three brokerages remain positive on Axis Bank despite pressure on margins and operating expenses during the September quarter. The private lender reported a 37.6% YoY increase in net profit to Rs 7,003 crore, supported by lower provisions.
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Net interest income rose 11.8% to Rs 15,371 crore, while advances grew 23% and deposits increased 20.7% YoY.
However, net interest margin declined to 3.36% from 3.46% in the preceding quarter, largely reflecting the impact of foreign currency non-resident, or FCNR(B), deposits. Excluding this impact, margins stood at 3.47%, broadly stable sequentially.
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