Axis Bank shares rose over 4 percent on Thursday after the lender reported improved asset quality in its September quarter results, helping the Bank Nifty index climb past the 57,200 mark.
The stock rose 4.04 percent to an intraday high of Rs 1,216.90 on the NSE, after opening with a 4 percent gain. The rise came after two consecutive sessions of decline.
According to data compiled by LSEG, at least eight of the 40 brokerages tracking Axis Bank raised their price targets following the results.
"Improvements have been substantial, including credit cost decline and better-than-estimated net interest margin resilience," analysts at HSBC said in a note.
HSBC raised its target price on the stock to Rs 1,460 from Rs 1,340. Jefferies also increased its price target to Rs 1,430 from Rs 1,370 and retained its “buy” rating.
Axis Bank on Wednesday reported a sharper-than-expected drop in quarterly profit, but total deposits grew 11 percent year-on-year and credit costs declined.
Its net interest margin fell to 3.73 percent from 3.8 percent in the previous quarter and 3.99 percent in the year-ago period. Jefferies had expected a 20-basis-point sequential decline in margins, while the bank reported a 7-basis-point fall, which analysts viewed as a positive sign.
The Bank Nifty index recovered from previous day losses to trade above 57,000, with analysts at Choice Broking identifying resistance at 57,100–57,200. Analysts have given a target of 57,500 for the bank Nifty index.
Axis Bank was the top gainer on the index, followed by Kotak Mahindra Bank, which rose up to 2 percent intraday. Punjab National Bank, HDFC Bank, ICICI Bank and IndusInd Bank were also among the gainers.
Investor sentiment in the banking space was further supported by reports of a potential public sector bank consolidation, with government sources indicating that the Centre is working on a merger plan to combine smaller lenders with larger state-run banks.
(Inputs from Reuters)
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