Axis Bank stock plunges after Q3 profit, NII, NIM fall short of Street expectations; should investors be worried?

Axis Bank share price target 2024, Axis Bank share price NSE: Why are Axis Bank shares falling today? Axis Bank shares faced heavy selling on Wednesday after the private sector lender reported a quarterly net profit that, along with net interest income (NII) and net interest margin (NIM), fell short of Street estimates. The stock of Mumbai-headquartered Axis Bank fell by as much as Rs 68.1, or 6.2 per cent, to Rs 1,020.9 apiece on BSE, and by Rs 68.4, or 6.3 per cent, to Rs 1,020.9 apiece on NSE, and remained the top loser on both Sensex and Nifty50 in morning deals.  The counter ended at Rs 1,059.6, down 2.72 per cent on NSE.

Axis Bank Q3 results

After market hours on Tuesday, Axis Bank reported a 3.7 per cent year-on-year increase in standalone net profit to Rs 6,071.1 crore for the October-December period. The bank's net interest income (NII), or the difference between interest earned and interest paid, grew to Rs 12,532.2 crore from Rs 11,459.3 crore a year ago, according to a regulatory filing.

Its net interest margin (NIM), a key measure of profitability for lenders, stood at 4.01 per cent for the quarter ended December, as against 4.11 per cent for the previous three months. Read more on Axis Bank Q3 earnings

Axis Bank share price target: Here's what brokerages recommend

Citi maintained a 'buy' call on Axis Bank after the lender's earnings announcement. However, the brokerage reduced its target for the stock to Rs 1,370 from Rs 1,380.

The bank's sequential deposit growth, at 4 per cent, outpaced peers but was dominated by non-retail term deposits, which rose 12 per cent, according to the brokerage.

Jefferies retained a 'buy' rating on Axis Bank with a target price of Rs 1,380.

According to the brokerage, the lender's profit was a tad below estimates due to weaker NII and NIM. Credit costs stayed low and the bank utilised some buffers into operational expenditure, it added.  

"Valuations at 1.8x FY25 Adj PB/10x PE Are Attractive & 20 per cent+ Disc To ICICI," analysts at the brokerage wrote in a note. 

HSBC continued with its 'buy' rating on Axis Bank with a target of Rs 1,404.

While the lender's healthy loan growth, in-line NIM compression, and low credit costs were positives, its retail deposits grew a tad slower, according to the brokerage.

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