Axis Bank shares trade with minor gains as global brokerages divided on the lender's outlook

Axis Bank share price: Shares of Axis Bank in Friday's session traded higher at Rs 1,003.2, up 0.42 per cent after the lender's Analysts Meet on November 23. At the day's high, the stock scaled to levels of Rs 1,005. The scrip in the previous session closed flat with a positive bias at Rs 999.05 on the BSE.

The lender, in its Analysts Meet, said the investments in long-term distinctiveness have started yielding visible results. Further, it added that the inherent strength is giving the bank the right to win in RuSu markets or rural and semi-urban markets through the Bharat Banking platform. Besides, other strengths that were highlighted are listed below:

Better quality balance sheet and balance sheet buffers
• Granular advances and corporate books of better quality
• Better quality of other income and a more granular fee
• Significant leadership in digital
• One Axis and subsidiaries scaling up meaningfully

Global Brokerages' views on Axis Bank

CLSA is bullish on the counter and has maintained its buy call on the stock with a target price of Rs 1,200. The brokerage stated that the lender's GPS (growth, profitability, and sustainability) strategy is on track. Bharat banking is a key growth lever; deposits are a focus area too, it said. The brokerage is bullish on the lender's digital offerings, including continued investments in technology and analytics.

Morgan Stanley has also maintained an 'overweight' rating on the lender with a target of Rs 1,275 per share. Digital initiatives continue to strengthen further. Also, it pointed out that the bank doesn’t intend to raise capital under its current structure.

Meanwhile, another brokerage, Jefferies, maintained its 'Buy' call on the lender with a target of Rs 1250. For the brokerage, the efforts taken to boost deposits are paying off.

Further, the brokerage sees a ramp-up of wealth clients, corp salary a/c, and a rise in the share of lendable and retail deposits. Further, the brokerage foresees a limited impact from the RBI's cautious stance on unsecured and NBFC loans. Further, it sees the asset quality at the lender to be stable, and a RoE of 18 per cent can be sustained.

On the contrary, Macquarie maintains a 'neutral' stance and sees it hitting a target of Rs 980. The brokerage iterates that the lender will take at least 8 more quarters for normalisation in its deposit growth. Further, it said that cost ratios will remain sticky in the near term. For, the brokerage, the lender has been posting in-line performance of its Citi portfolio.