Sharekhan, Jefferies bullish on Axis Bank; see up to Rs 200 per share gain

Axis Bank Share Price: Axis Bank shares have a potential upside of Rs 200 per share as multiple levers are set to lift the stock, said domestic brokerage firm Sharekhan. The optimism is on expectations of sustained year-on-year growth in advances and a stake purchase in Max Life Insurance Company. 

Brokerages Sharekhan and Jefferies are bullish on this stock ahead of the quarterly earnings announcement by the third largest private lender. 

Axis Bank shares were trading at Rs 950.05 on NSE on Wednesday, down by Rs 2.10 or 0.22 per cent from the previous closing price.  

While Sharekhan sees Rs 200 per share gains which translated into 21 per cent upside, Jefferies sees Rs 158 or 17 per cent uptick. Former puts a price target of Rs 1140 while latter at Rs 1,110. 

Triggers 

1) Sharekhan estimated a 16 per cent y-o-y growth in advances led by retail and SME segments. The Net Interest Margins (NIMs) are likely to go up sequentially, it noted in its report. Key monitorable would be the progress of the Citi portfolio and improvement in operating profit growth led by some improvement in cost ratios. 

Source:Sharekhan

2) Jefferies, on the other hand opines that Axis Bank’s acquisition of 7 per cent stake in Max Life Insurance will do the trick for the private bank. This will take its stake to 20 per cent. Deal is positive for Max Life, Jefferies commented, highlighting that the opportunity will offer Axis Bank visibility in bancassurance along with MFS (Mobile Financial Services. The stock was recommended at a price of Rs 952. Axis may recover value with higher commission that may impact margins a bit. 

Technical View:  

Technical Analyst Nilesh Jain advice investors to buy this share on declines and the right levels to enter in this stock are between Rs 930 and Rs 920. The chart structure suggests a positive bias and an upside up to Rs 1,000 is open from current levels, Jain said. He puts the stop loss at Rs 900. 

Source: NSE

The stock has outperformed Nifty50 by over 28 per cent and has given returns of 27.8 per cent over a 1-year period as against 0.5 per cent returned by the broader market index, according to data sourced from Trendlyne. The stock has traded with average volatility and at a 12-month beta of 1.04.   

Momentum indicators RSI and MFI suggest stand at 58.8 and 55.2. A number below 20 indicates that the stock is trading in oversold territory while a number above 70 is indicative of counter trading in overbought zone.         

Also Read: HDFC Bank vs ICICI Bank vs Axis Bank vs Indusind Bank: Which stock offers more value for your buck?

(Disclaimer: The views/suggestions/advises expressed here in this article is solely by investment experts. Zee Business suggests its readers to consult with their investment advisers before making any financial decision.)