Axis Bank share price to soar 28 pct in one year, say stock market experts

Axis Bank share price has been trading in the range of Rs 810 per stock levels to Rs 750 levels in the last six months. The banking stocks which have always remained a favourite share to buy among the foreign institutional investors (FIIs) and domestic institutional investors (DIIs) failed to catch the attention of the share market investors in the recent bull run at Dalal Street. So, stock market experts are expecting Axis Bank to shot up in the New Year 2020 and hit Rs 958 levels in one year. Currently, Axis Bank share price is oscillating around Rs 749 per stock level.

Speaking on the triggers that would inject rally in Axis Bank shares Dipen Sheth, Head- Institutional Research at HDFC Securities said, "We like the well-articulated (and executed) strategic revamp so far, post the top management change last year. Combined with strong liability franchise and product suite, reducing stress and capital raise this makes Axis Bank one of our top picks for 2020. While the recent Rs 125bn fund raise had us puzzled, we recognize that it will only add to ammunition, as competition grapples with uncertain times." He said that the markets expect a significant improvement in return ratios over FY21-22E, driven by a reduction in credit costs. Sustained reduction in reported (GNPAs around 5 per cent, -100bps YoY) and anticipated stress pools (BB and below exposure at around 2 per cent) and decent coverage ( near 62 per cent calc. and about 9 per cent contingent provisions) provide comfort. 

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Recommending share market investors to buy Axis Bank shares Rohit Singre, Senior Technical Research Analyst at LKP Securities said, "Axis Bank chart shows attractive upside movement and the counter may break its upper range of Rs 810 in next one to two months. One can buy the Axis Bank stock at current levels for the target of Rs 800 in the next one to two months keeping a stop loss at Rs 715 per stock levels."

On limitations that may pose impediments in the Axis Bank rally, Dipen Sheth said, "A reversal of the ongoing trend of asset quality improvement, with higher slippages and slower recoveries would be a prime risk factor. This holds more than academic importance, given the sluggish economy. While the change in top management is welcome and will naturally lead to some (desirable) attrition below, we are wary of rising churn in middle management which can have an impact on near term business stability." 

On his suggestion to the stock market investors in regard to Axis Bank shares, Dipen Sheth said, "One can buy Axis Bank shares for the target of Rs 958 per stock levels in a long-term horizon."