Axis Bank share price declined 6 percent in early trade on April 29 after the company reported its March quarter result.
The bank has reported a loss of Rs 1,387.78 crore for the quarter ended March 2020, missing analysts' estimates.
It had reported a profit of Rs 1,505.06 crore in the corresponding period last year and Rs 1,757 crore in December quarter.
Net interest income, the difference between interest earned and expended, increased 19.3 percent year-on-year to Rs 6,807.74 crore.
Advances grew 15 percent YoY to Rs 5,71,424 crore as on March 2020, while retail loans rose 24 percent YoY to Rs 3,05,400 crore (which accounted for 53 percent of the net advances) and corporate loan book growth at 11 percent YoY to Rs 2,04,103 crore.
Total deposits on quarterly average basis grew by 19 percent and 17 percent YoY on period-end basis.
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The research house has maintained a buy call with a target price of Rs 530 per share, reported CNBC-TV18.
Performance of moratorium book is the key as it forms 25 percent of overall loans. The FY21 PAT will be weak on higher credit costs and weaker topline.
However, the key cushion for earnings is in its buffer provisions, while a strong deposit franchise and well-capitalised balance sheet can help return to growth in FY22.
The bank has reported decent operating performance as loans grew 15 percent YoY, while the loss of Rs 1,400 crore was due to a higher provision for buffer, reported CNBC-TV18.
It has maintained a buy rating with target at Rs 595. The deal with Max Financial is positive, CLSA added.
It has lowered its loan & fee growth assumptions marginally.
The lockdown extension & further opting of moratorium may add to risks of NPAs, but will have to watch if the industry will have similar trends, said Prabhudas Lilladher.
With such risks we build-in higher slippages rate & credit cost, similar to last 2-3 years pausing asset quality improvement on exiting a bad corporate cycle. We downgrade to hold from buy with revise target to Rs 475 from Rs 609 based on 1.5x (from 1.8x) Mar-22 ABV, it added.
At 09:17 hrs, Axis Bank was quoting at Rs 437.10, down Rs 18.45, or 4.05 percent on the BSE.