Axis Bank shares edged lower on Tuesday, even as India’s fifth largest lender by market value reported a strong set of results for the October-December period driven by strong interest income, higher fees and moderating operating expenses. The Axis Bank stock weakened by Rs 10.3 or 1.1 per cent in early deals to Rs 923.1 apiece on BSE. Brokerages largely have positive views on Axis Bank after the earnings announcement.
Minutes after the closing bell on Monday, the bank reported a 61.9 per cent year-on-year jump in quarterly net profit to Rs 5,853.1 crore, beating analysts’ estimates. Its net interest income (NII) — or the difference between interest earned and interest paid — increased 32.4 per cent to Rs 11,459.3 crore, according to a regulatory filing.
According to Zee Business research, Axis Bank was estimated to report a quarterly net profit of Rs 5,480 crore and net interest income of Rs 10,900 crore.
Axis Bank’s net interest margin (NIM) — a key measure of profitability for lenders — improved by 30 bps sequentially to 4.26 per cent for the quarter ended December 2022.
What brokerages say on Axis Bank
UBS on Axis Bank (CMP: 933)
Maintain Buy, Target raised to Rs 1100 from 1030
Overall beat supported by margins
Margin expansion & Operating leverage drive Q3 beat
Higher yielding loans growing faster
Management believe internal capital generation sufficient to fund growth
CLSA on Axis Bank (CMP: 933)
Maintain Buy, Target 1250
3Q again a big beat, with better margins (+30bps QoQ) & lower opex (just +8% YoY)
leading to more than 50% core PPOP growth (11% higher than forecast)
Moderation in opex growth is a clear +ve
Raise FY24-25CL net profit by 1-3%
Morgan Stanley on Axis Bank (CMP: 933)
Maintain Overweight, Target raised to 1200 from 1150
PAT 9% above MSe; beat was all around – NIMs, fees, costs all surprised +vely
Retail deposits, per LCR, grew 3% QoQ, in line with HDBK/ICBK
RoA was 1.7%, RoE 16%.
Val at 1.8x F24e P/BV looks attractive
JP Morgan on Axis Bank (CMP: 933)
Maintain Overweight, Target raised to 1100 from 990
Jefferies on Axis Bank (CMP: 933)
Maintain Buy, Target raised to 1170 from 1110
HSBC on Axis Bank (CMP: 933)
Maintain Buy, Target raised to 1200 from 1188
Macquarie on Axis Bank (CMP: 933)
Maintain Neutral, Target 790
Earnings beat due to better performance on margins
Weak liabilities franchise a concern
Loan growth is lagging its larger peers
Well capitalised – still believe there is a chance of capital raising by end of 4QFY23
(This story will be updated shortly)
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