Axis Bank shares jump 10% in 2 trading sessions - Know why; check triggers

Banking heavyweight Axis Bank shares surged almost 10 per cent in the last two sessions on the back of multiple triggers – robust Q3 numbers and global rating agency has also upgraded the outlook.  

The stock on Thursday gained nearly 3 per cent to Rs 773 per share on the BSE intraday trade, also one of the top gainers in Nifty50, after Maruti and SBI. The scrip is aiding most to Nifty Bank’s surge.  

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In Q3FY22, the private lender had reported a 224 per cent year-on-year jump in its net profit at Rs 3,614 crore for the December-end quarter on January 24, 2022. While its net interest income grew by 17 per cent YoY to Rs 8,653 crore in the third quarter of the current fiscal.  

The bank’s asset quality in Q3 improved too as gross non-performing assets (NPA) declined by 36 basis points (bps) to 3.17 per cent and net NPA dipped by 17 bps to 0.91 per cent, sequentially. Similarly, the bank’s net loan slippage also fell by 38 bps to 0.06 percent in the reported quarter, it said. 

Amid improving asset quality, S&P Global Ratings has revised Axis Bank’s outlook to positive. The bank is likely to sustain improvements in asset quality supported by an economic recovery and improved risk management, it mentioned while revising the outlook. 

The rating agency said in a statement, “We revised our outlook on the India-based bank to positive from stable. At the same time, we affirmed our 'BB+' long-term and 'B' short-term issuer credit ratings on Axis Bank under our revised criteria. We also affirmed the 'BB+' long-term issue rating on the bank's outstanding debt.” 

The positive outlook reflects a one-in-three chance that Axis Bank's asset quality metrics could be commensurate with higher-rated Indian and international peers over the next 12-18 months, it said. 

At around 03:17 pm, the stock is up almost 3 per cent to Rs 773.55 per share on the BSE, as compared to 0.88 per cent fall in the S&P BSE Sensex.