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Last Updated : Jan 27, 2015 02:39 PM IST | Source: Moneycontrol.com

Axis Bank hits new high; Morgan Stanley, Macquarie bullish

Macquarie also maintains outperform rating on the stock with a target price of Rs 650 while Axis is also one of its top marquee ideas in the regional space.

 
 
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Moneycontrol Bureau


Shares of Axis Bank hit record high at Rs 582 per share, up 3 percent intraday on Tuesday as brokerages maintained bullish rating. Morgan Stanley is overweight on the stock with an increased target of Rs 840 from Rs 700 per share. The brokerage feels that Axis Bank offers great risk-reward and expects 28 percent EPS CAGR over next 2 years.


Morgan Stanley further states that the bank still trades at a discount to other private banks and multiples will continue to expand.

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Macquarie also maintains outperform rating on the stock with a target price of Rs 650 while Axis is also one of its top marquee ideas in the regional space.


“Over the past one year, Axis has significantly outperformed ICICI. Even on a 3m and 6m basis, the outperformance has been sharp. We believe the outperformance is likely to continue and would prefer Axis over ICICI if investors had to choose only one,” Macquarie says in a note.


However, it warns that ICICI is now close to the caution limit of 72 percent foreign holding and the moment it crosses this, RBI may place it on the caution list. If that happens, Macquarie expects MSCI to reduce its weightage of ICICI, resulting in the selling of the stock by passive funds.


Axis Bank's third quarter net profit rose 18.45 percent year-on-year to Rs 1,900 crore, boosted by other income. Rise in provisions, however, checked bottomline growth.


Gross non-performing assets (NPA) as a percentage of gross advances increased marginally to 1.34 percent during the quarter compared to 1.25 percent in the year-ago period while net NPA rose to 0.44 percent from 0.42 percent during the same period. However, on sequential basis, both NPAs remained unchanged.


At 12:51 hrs Axis Bank was quoting at Rs 578.75, up Rs 13.75, or 2.43 percent on the BSE.

(Posted by Nasrin Sultana)



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First Published on Jan 27, 2015 02:39 pm
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