Axis Bank shares rallied 5% to the day’s high of Rs 1,119 on Thursday after the company posted results better than market expectations yesterday. The lender reported a robust profit of Rs 7,129.67 crore for the March quarter, supported by margin expansion and higher non-core incomes.
Q4FY24 net interest income (NII) grew 11% YoY and 4% QoQ, while PAT stood at Rs 7,130 crores, up 17% QoQ.
The board of directors also recommended a dividend of Re 1 per share for the year ended 31st March 2024.
The private bank also announced that its board has approved raising of funds worth Rs 55,000 via a mix of debt and equity. Of the total approved plan, the lender will raise around Rs 35,000 crore through the issue of various debt instruments including long-term bonds, masala bonds, and sustainable, optionally/compulsorily convertible debentures among others.
The remaining Rs 20,000 crore will be by issue of equity shares or related securities.
After the impressive Q4 results, here’s what brokerages have to say:
Morgan Stanley
Among other global brokerages, Morgan Stanley has an overweight rating on Axis Bank with a target price of Rs 1,450.
JM Financial
Axis Bank remains one of the top picks as the brokerage firm believes it can re-rate further given sustained pick up in deposit growth while maintaining margin trajectory and asset quality. JM Financial rated Axis Bank as a ‘buy’ with a target price of Rs 1,330.
Jefferies
Global brokerage firm has a positive outlook for the bank and hence, has a ‘buy’ recommendation with a target price of Rs 1,380, an upside potential of 24%.
Nuvama Wealth
Nuvama rates Axis as a ‘buy’ with a target price of Rs 1,270 as the brokerage firm states that Axis will likely grow deposits faster than loans in the near term. Management has also clarified that the approval for raising equity capital is only an enabling resolution.
With the merger drag on HDFC Bank, ban on Kotak and higher valuation for AU, Axis Bank offers attractive risk-reward.
CLSA
Foreseeing an upside potential of 18%, CLSA has suggested a ‘buy’ recommendation for Axis, with a target price of Rs 1,310.
Motilal Oswal
Motilal estimates Axis Bank to deliver a 14.5% CAGR in loans over FY24-26. Accordingly, they also estimate FY26 RoA/RoE of 1.8%/16.8%. With this backing, they retained a ‘neutral’ rating for the bank with a target price of Rs 1,200.
(Disclaimer: Recommendations, suggestions, views and opinions given by the experts are their own. These do not represent the views of Economic Times)
