Axis Bank shares have surged over 9 per cent since the private lender declared its September quarter earnings last week on Thursday, October 20. Axis Bank stock price settled at Rs 900 on the NSE on Tuesday.

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Axis Bank reported a 70 per cent jump/decline on year-on-year (YoY) basis in its net profit at Rs 5,330 crore. It had reported Rs 3,133 crore a year ago in the same period.

Axis Bank’s revenue came in at Rs 20,238.93 crore in the quarter under consideration, jumping 24 per cent YoY from Rs 16,336.01 cr in the year ago period.

Axis Bank’s net interest margin (NIM) grew 31 per cent YoY and 10 per cent QoQ to Rs 10,360 cr.

Brokerages mixed on Axis Bank

Most brokerages have taken a positive view on Axis Bank after the lender’s September quarter results highlighting expansion in Net Ineterst Margins (NIM) as a key factor. Net interest margin (NIM) for Q2FY23 stood at 3.96 per cent, up 57 bps YoY and 36 bps QoQ.

As many as five, including CLSA, Goldman Sachs, Nomura, HSBC and Jefferies, have a ‘buy’ rating on Axis Bank with target price ranging between 10-27 per cent.

  

1) CLSA maintains a Buy on Axis Bank and has revised its target to Rs 1150 from Rs 1100. It cites big Jump in margins as the reason for upward revision of the target. The current levels could be sustainable, it said. Loan growth improved but liability mobilisation will be key, the brokerage further said. With the ROEs of over 16 per cent, the stock deserves re-rating, it said. Goldman Sachs maintains a ‘Buy’ and raised target to Rs 1053 from Rs 1007. Strong 2QFY23 core profit beat on NIM expansion. Gains likely to sustain and push up PPOP-ROAs 2QFY23 should drive earnings upgrade and re-rating.

Morgan Stanley maintains ‘Overweight’ with a revised target of Rs 1150 from Rs 1000. F2Q23 PAT 21% above MSe. “Beat was all around and led by 31 per cent YoY growth in NII (6 per cent above MSe), strong fees and sharp moderation in opex. Deposit growth was muted; expect acceleration by F2H23 Expect stock to re-rate.”.

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