CLSA and Macquarie have given mixed views on Axis Bank’s Q3 performance. While they both see internals to be strong, CLSA is more optimistic on earnings rebound ahead. The latter, believes headline loan growth seems optically weak.
It touched a 52-week high of Rs 703.00.
The private sector lender posted 131 percent jump in its Q3FY19 net profit at Rs 1,681 crore, beating market estimates.
Analysts were expecting third-quarter profit growth in the range of 50-110 percent over the same period last year, partly driven by lower provisions.
The company had reported profit of Rs 726.44 crore in a year ago period.
Net interest income (NII) was up 18 percent at Rs 5603.6 crore versus Rs 4,732 crore in Q3FY18.
Brokerage: CLSA | Rating: Buy | Target: Raised to Rs 840 from Rs 800
The global research firm said that earnings could rebound ahead and steady growth shall drive a re-rating. Q3 slippages were higher but CEO comfort & better recoveries should abate concern, it said. CLSA raised earnings forecast by 6 percent for FY20-21.
Brokerage: Macquarie | Rating: Neutral | Target: Rs 620
Macquarie observed that there were negligible divergences for FY18. It added that loan book looks transparent now.
Headline loan growth looks optically weak, but internals strong. Further, there are no changes to earnings per share (EPS) estimates.
Disclaimer: The above report is compiled from information available on public platforms. Moneycontrol.com advises users to check with certified experts before taking any investment decisions.
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